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Learning, Sharing, and Teaching => Case Studies => Topic started by: dashh on January 16, 2017, 02:44:10 PM

Title: Reader Case Study - $231k in debt and need help!
Post by: dashh on January 16, 2017, 02:44:10 PM
Deleted
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CheapScholar on January 16, 2017, 02:58:44 PM
Are you paying private mortgage insurance?  Is your $315K house excessive?  I ask because I don't know what your local market is like.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on January 16, 2017, 03:01:38 PM
I applaud you for giving such a data-rich case study.

First the cold hard truth:  you have a hair-on-fire debt emergency but you are currently spritzing it with water from a squirt gun in the hopes that it will just go out.
It's time to make some more serious moves.

For starters I'll not the following:
Cable has to go & find a cheaper internet.
Hair/Nails - DW has to be on board to chop this expense
Groceries - plenty of ways to feed a family of 4 very well on $400/mo
"Going-out" of $100: sorry but you can't go to restaurants without shoes, a shirt, or when your hair is seriously on fire.
Utilities: varies from locale and home efficiency, but seriously consider whether you can cut this by 25%  Drop the thermostat and eliminate a/c
Your cars.  Oh god your cars.  $1,000+/month in car payments.... very poor fuel economy (Pilot ~20mpg?) and long commutes. Worse, they're financed and not at the greatest of rates (4.09%)

Several of your credit card rates are astronomical and need to be tackled IMMEDIATELY.  35.9%??  Start seeing which of these can be transfered to a lower card, nad then attack the others with a vengance.

Other thoughts:
time to think about alternatives.
Can you take on a renter (e.g. a university student)?
What can you possibly do to get full-time employment again?
Time to sell at least one car and buy a cheaper, fuel-efficient car
What's available for you to car-pool.  Your commuting budget is a big problem.
Can you move closer to work and into a cheaper home? This step along might solve lots of problems.
Sell things to pay off debt - what do you own that you no longer use and is cluttering the house?

Good luck!

ETA:  You obviously understand on some level that things need to change, and in a radical fashion. Your DW has got to get on board too, though. It appears that you've been living way beyond your means for some time, and "past-self" is giving "present-day-self" the shaft.  That bites, but either you dig yourself out of this mess or "future self" is screwed too.  I agree with CheapScholar's assessment that this isn't a band-aid fix; you've got to find a way of throwing several hundred dollars more per month at your debt.  Kids adapt easily enough, especially at that age.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 16, 2017, 03:06:01 PM
I think you need some background on how you got here.  Is this what you are really spending or what you wish you spent?  You don't end up $231k in debt plus a $302k mortgage on $180k gross without a SERIOUS spending problem.  I'm guessing from your daycare expense that you're in relatively low cost of living, unless that is not full time daycare.

Basically, you are living an entire life you cannot afford.  This is not a "tweak the budget by $200 on groceries" problem, this is a "restructure your entire financial life" problem.  I applaud you for facing the problem head on, but you definitely need to confront whether you're actually in a place to fix this problem.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Proud Foot on January 16, 2017, 03:11:28 PM

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187


It looks like you have outlined some good starts changes in your budget.  For the debts it would really help a lot if you could sell the Frontier for around the $13k you estimate it is worth.  Then purchase yourself a good used car for cheap like you mentioned.  Since your spouse is not on board I would not suggest selling the other vehicle for now.  So selling the Frontier and buying a new car, try to net $6-7k.  Since you already have $10k in the bank I would keep that as an emeergency fund and then use the sale proceeds to start on the loans.  Personally I would pay off Loan #3 and put the rest to the IRS debt. Then I would use the $809 freed up to work to get the IRS paid off ASAP. Thats how I would do it because the IRS is a lot more powerful than any of your other creditors.

If the IRS debt doesn't bother you, I would pay off Loan #1, Loan #3, and the remainder on Loan #2.  Then using the $986 freed up from your three paid off loans I would start hitting the payments hard on the loans with the highest rates to the lowest.

Until you are able to sell the car or get a full time job consistently making more money I would do the Dave Ramsey method and throw anything extra at Loan #3 to help alleviate your monthly cashflow.  Once you have a little more free cash each month or get the car sold then change back to paying them down from the highest rate to the lowest.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BlueHouse on January 16, 2017, 03:13:08 PM
Life Situation:  Married filing jointly, early 40’s with two kids (8 and 2).  My wife and I both have 60 mile round trip commutes to work each day.  I was laid off around 2 years ago and am currently doing contract work in finance and trying to find a full time job.  I am starting a journal to give more background/context on our current life situation and how we got here.  I am looking for help and advice as we begin to dig ourselves out of the pile of debt we have accumulated.

Gross Salary/Deductions/Taxes:

mr. d mrs. d
Gross pay $1,788.75 $7,273.22
Pre-Tax
  Dental $-    $34.00
  Medical $-    $332.00
  Vision $-    $13.00
    Total Pre-Tax: $-    $379.00
Adjusted Gross Income: $1,788.75 $6,894.22
Taxes
  Federal $241.71 $814.76
  State $94.56 $366.00
  OASDI $110.90 $434.96
  Medicare $25.94 $101.72
    Total taxes: $473.11 $1,717.44
Post-Tax
  401(k) loan $-    $565.22
    Total Post-Tax: $-    $565.22
Net Pay: $1,315.64 $4,611.56

I am working an hourly contract position so my take home varies some with non-paid holidays and time off.  The breakdown above is for one week for me and my DW is paid monthly.  Our monthly take home is ~$10k.  I am trying to get a full time job to maximum income.

Current expenses/budget:

Original Revised
Monthly Monthly Monthly
Expenses Expenses Savings Comments
Cable/Phone $260 $80 $180 Canceling cable - Internet plus Netflix?
Cell Phone $32 $32 $- Verizon Prepaid flip phone
Daycare $490 $490 $-
Dog Wellness Plan $25 $- $25 Cancel
Eating Out $100 $100 $-
Electric/Gas/Water $340 $340 $-
Entertainment $100 $50 $50
Gas $400 $400 $-
Groceries $600 $600 $-
Hair/nails $100 $100 $- Need to discuss with DW
Auto Insurance $81 $81 $- Get quotes
House Cleaning $160 $- $160 Cancel
Lawn care $39 $- $39 Cancel
Medical/Health $30 $30 $- Copays - prescriptions
Pest control $53 $- $53 Canceled
Security $40 $- $40 Cancel
Shopping/Birthdays/Misc $125 $100 $25
Tithing $60 $- $60 Cancel?
YMCA $65 $- $65 Cancel
YMCA Childcare $277 $277 $- Looking for ways to at least cancel early care $114
  Total Monthly Expenses: $3,377 $2,680 $697
Car Pmts $1,040 $1,040 $- Frontier paid off March 2017
Credit Cards $1,405 $1,405 $-
IRS $240 $240 $-
Mortgage $1,986 $1,986 $-
Personal loans $1,941 $1,941 $-
Student Loans $561 $561 $-
  Total Debt Expenses: $7,173 $7,173 $-
Grand Total Expenses: $10,550 $9,853 $697

Our monthly take home pay is ~10k (varies some with my hourly contract job), so with the revised budget it will still be tight. 

Mortgage:
Principle & Interest = $1,596 (5/1 ARM @ 4.5%)
Taxes & Insurance =      $390
Total monthly =          $1,986

Assets:
Primary residence – Owe $302k, worth ~$315k
Autos – Frontier Owe $1k, worth ~$13k
             Pilot owe $25k, worth ~$25k
Cash - $10k
401k - $53k

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187

My thoughts on a plan moving forward (any advice on these or others are appreciated):

1)    Trim the monthly budget even more to free up some cash.  This is going to be a transition for our family as we have lived beyond  our means for some time.  I am all in – the DW is going to need some help though.  The kids will adapt.

2)   Sell the cars and pay cash for used ones.  I know everyone is going to suggest this and I know it needs to happen.  My plan would be to buy a Honda Civic for $4k - $5k for myself and buy the DW a Honda Odyssey for $8k - $9k.  I anticipate my DW is going to freak out though so any suggestions on having that discussion would be appreciated.

3)   Get a full time job to maximize income and then use some of our cash to start paying down debt (highest interest first).  With my employment situation being hourly/contract we have been just trying to make it month to month and kept the cash just in case. 

So there you have it – our financial mess.  We are drowning in debt and have to begin digging out.  Obviously our primary goal is to get stable and begin paying down the debt.  I have a lot of mixed feelings right now – extreme embarrassment and shame, fear and a little bit of empowerment. 

I have followed the Beatles thread and know the face punches are coming.  I am ready and deserve them all.  However, I am hoping after the punches you guys will pick me back up and support me in this journey.  I am committed to making this happen.  Let the beatings (and then healing) begin…

Not sure I understand how you've laid out your budget.  If you're showing one week of income for you against one month for your wife, does that mean that you only work the equivalent of one week per month or are you making 4 times that amount?   (I know you're PT right now, that's why I'm asking).  Right now this looks very very bad, as if you cannot come close to covering even your revised budget.  But I think I may be misinterpreting your budget.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BabyShark on January 16, 2017, 03:18:51 PM
I'd be curious about what others think about selling the Pilot and getting something much cheaper with better fuel efficiency.  $400/month in gas is a lot to me, though with your commutes, I see why.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: notactiveanymore on January 16, 2017, 03:28:36 PM
Follow up questions:

How do you and your wife handle finances right now? Are you tracking spending or making a budget together? Does she have a full picture of your current debt to income situation?

Are you still using the credit cards?

First Thoughts:

The Cars. Yeah, $1040/month is ludicrous when you're sending over 70% of your take-home income (+500 deducted on 401k loan) on debt. It's ludicrous in almost any financial situation to be honest. If you sold both vehicles and bought two used ones with the profit, you would be at 206k in debt AND have an extra $1000/month to put towards debt. That would be a huge jump start on this plan. If you don't do that and can't get your income higher, then you are going to have a very very very difficult time ever getting ahead of things. You can't cut 70% of your budget because it's minimum payments. The cars are one of the only real things you can get rid of to make room in your budget. Everything else you've already listed just gets you back to living within your means and not charging anything.

Using Savings. I would probably use some of your savings to pay off debt. I'd maybe leave 3000 in savings and use the 7000 to pay off Loan 3, CC #9, and Loan 1. I think that leaves you with $500 to put to Loan 2. That (combined with selling vehicles) would leave you with a new monthly debt payment cost of $3645 or an extra $1542 a month to pay off debt.


Loan #1   $4,676   35.90%   $177   
Loan #2   $3778   27.98%   $194   
CC #9   $1,000   26.24%   $41   
CC #1   $2,588   25.99%   $28   
CC #2   $2,279   24.99%   $72   
CC #3   $7,997   24.49%   $198   
Loan #3   $882   20.00%   $284   
CC #4   $8,447   15.49%   $231   
CC #5   $4,376   14.90%   $109   
Loan #4   $31,148   10.75%   $720   
Student loan #1   $49,036   6.88%   $368   
Auto loan #1   $25,868   4.09%   $515   Honda Pilot
Auto loan #2   $1,172   3.84%   $525   Nissan Frontier

Student loan #2   $4,066   3.63%   $86   
401K loan   $27,743   3.25%   $565   
Student loan #3   $2,508   2.75%   $108   
CC #6   $17,711   2.00%   $339   5-year pmt plan
CC #7   $2,032   0.00%   $78   
CC #8   $16,662   0.00%   $309   5-year pmt plan
IRS   $17,290      $240   Requesting 72 month pmt plan

At that point, I'd go down the list from highest interest to lowest and snowballing the payment from each paid off debt into a larger extra payment on the next.

The House. It's going to take you YEARS on YEARS to pay off all of this debt with only an extra $1542/month. You're probably going to need to sell your house if you want to pay this stuff off. You need more of a margin. You guys make great money, the income is not your primary problem.

ETA: Are you sure CC #1 and #3 details are correct? I put your numbers in a snowball calculator and it said that you'd never pay those off with the listed minimum payments.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on January 16, 2017, 03:33:25 PM
I'd be curious about what others think about selling the Pilot and getting something much cheaper with better fuel efficiency.  $400/month in gas is a lot to me, though with your commutes, I see why.

My personal opinion is that this needs to happen if dashh is genuinely serious about eliminated this debt.  He/she did mention that selling one car and buying a used civic was a possibility, though DW might not be totally on board.
My recommendation is that they sell both and buy two used cars, and/or they move closer to work and downsize their house.  The latter will have more real results but obviously will be a much more disruptive change.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CheapScholar on January 16, 2017, 03:34:36 PM
How opposed do you expect your wife to be about getting your financial health in order?  Does she know you're on here seeking advice?  This is a BAD situation that requires two people working in tandem.  Right now you're on a path that leads to collecting social security & having little else to rely on, massive debt that leads to bankruptcy, not providing much of anything for your children, and possibly being a financial burden/embarrassment for them. 

Next question, what do you expect you can bring in once you find full time work?  If you can start throwing your new revenue at your debt and your wife is willing to make a few changes you might possibly be able to get out of this mess.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 16, 2017, 03:39:03 PM
I think a lot of people are going to tell you to completely restructure your finances starting today.  My advice is a bit different.

First, the good news.  If you make NO CHANGES, you can snowball this debt paying minimum payments only in 51 months, or 4.5 years.  That includes the student loans.

Second, the bad news.  You will NEVER be debt free until you can stop the bleeding.  I think you need to really look hard at how you ended up in this place to begin with, and create a workable monthly budget that has you living within your means permanently.

There are lots of specifics about how you can do this, and I'm sure they will be well covered in this thread.  But the very basic truth is you are spending more than you earn, debt makes up a huge portion of your monthly costs, and you can't dig yourself out until you accept reality that money is a finite resource.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: notactiveanymore on January 16, 2017, 03:42:58 PM
I think a lot of people are going to tell you to completely restructure your finances starting today.  My advice is a bit different.

First, the good news.  If you make NO CHANGES, you can snowball this debt paying minimum payments only in 51 months, or 4.5 years.  That includes the student loans.

Second, the bad news.  You will NEVER be debt free until you can stop the bleeding.  I think you need to really look hard at how you ended up in this place to begin with, and create a workable monthly budget that has you living within your means permanently.

There are lots of specifics about how you can do this, and I'm sure they will be well covered in this thread.  But the very basic truth is you are spending more than you earn, debt makes up a huge portion of your monthly costs, and you can't dig yourself out until you accept reality that money is a finite resource.

Show your math! Even with the revised budget in the OP, they only have an extra $200 month for debt. That is not going to pay off 231k in debt in 5 years even with snowball...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on January 16, 2017, 03:45:01 PM
Have you considered not working (unless you can telecommute), staying at home with the kids, and getting by on one car?

Your wife's income is similar to my husband's, and we do quite well now on a single income, 3 kids, and larger monthly housing costs than yours. We drove a used sedan a long time, finally upgraded to a 2004 minivan last year. Husband bikes to train. We save about $2K/month out of his take-home pay (and could do better), but you would have to put that towards your debt.

For a few years I was working from home as a contract programmer, pulling in about $30K a year but this became untenable with a third child and a sick elderly parent.  It was not easy, but you might be able to pull off something similar if you can find a gig that will let you work from home.  When you aren't working for pay, you will have to be your own babysitter, housecleaner, cook, landscaping guy, and appliance repairman.

 theotherelise is right, the fastest way to pay off is to sell your house, and move to a smaller place near wife's work.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Unique User on January 16, 2017, 03:46:51 PM
I agree with everyone else and say sell the cars.  I get that your wife might have trouble cutting out certain expenses, but the hard truth is that you are in your early 40s and this much in debt.  You are WAY behind.  I'd set a strict budget for groceries probably around $400 to start and no restaurants or shopping.  Cut the cable, use your time to learn how to cook if you don't already or find some money making hobbies.  Search the forum for side hustles.  Sell EVERYTHING you can find in your house that you don't need.   

Hair and nails is a tough one, some women really have trouble with cutting this out entirely.  Personally I would halve it, tell her to find cheaper places and cut down on frequency.  You're going to need to ease her into this as quickly as you can, this is going to be a marathon for you to pay this all off and ever be able to retire. 

What is your likelihood in finding new employment?  Have you been looking for two years?  I think the other trap you might fall into is that once you get a new job and your income goes back up, you'll be tempted to go back to your old ways, but unfortunately in your early 40's you can't.  Once all your debts are paid off, you need to divert all that cash to retirement funds.  I started late too, we spent years either not working or only working part time.  But our household income has doubled in the last eight years and although we've eased up somewhat on the austerity, we haven't inflated to what most people would expect given out incomes.  Instead we've been maxing everything we possibly can - 401ks, IRAs, ESPPs, HSAs.  You came to the right place for support, good luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 16, 2017, 03:50:14 PM
I think a lot of people are going to tell you to completely restructure your finances starting today.  My advice is a bit different.

First, the good news.  If you make NO CHANGES, you can snowball this debt paying minimum payments only in 51 months, or 4.5 years.  That includes the student loans.

Second, the bad news.  You will NEVER be debt free until you can stop the bleeding.  I think you need to really look hard at how you ended up in this place to begin with, and create a workable monthly budget that has you living within your means permanently.

There are lots of specifics about how you can do this, and I'm sure they will be well covered in this thread.  But the very basic truth is you are spending more than you earn, debt makes up a huge portion of your monthly costs, and you can't dig yourself out until you accept reality that money is a finite resource.

Show your math! Even with the revised budget in the OP, they only have an extra $200 month for debt. That is not going to pay off 231k in debt in 5 years even with snowball...

I put the whole set of debts into the snowball calculator here: http://www.whatsthecost.com/snowball.aspx

Auto loan is paid off in 3 months, which frees up $525.  Loan #3 is paid off in 4 months, which frees up an additional $284.  With that $809 thrown at the highest interest debt, the snowball builds pretty rapidly.  I'm guessing it's not 100% right since those 0% cards are likely intro rates, but debt snowballs are incredibly powerful.  He's paying $5187 IN MINIMUMS, which certainly can pay off $231k in debt.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: FIFoFum on January 16, 2017, 03:53:00 PM
This is so much debt - and a lot of it debt that could be dischargeable - that you might benefit from talking to a bankruptcy lawyer.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: economista on January 16, 2017, 03:53:48 PM
One thing that really helped my SO get onboard with frugal living was just watching me do it.  He was very opposed to it at first, and he really didn't understand how finances worked.  I would mention little things here or there and I would demonstrate good behaviors (budgeting, reconciling the finances almost daily, etc) and eventually he came around.  He watched me pay down my debts quicker than he thought was possible and now he is fully on board and excited to have me help him with his.  Good luck!!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 16, 2017, 04:04:55 PM
I think a lot of people are going to tell you to completely restructure your finances starting today.  My advice is a bit different.

First, the good news.  If you make NO CHANGES, you can snowball this debt paying minimum payments only in 51 months, or 4.5 years.  That includes the student loans.

Second, the bad news.  You will NEVER be debt free until you can stop the bleeding.  I think you need to really look hard at how you ended up in this place to begin with, and create a workable monthly budget that has you living within your means permanently.

There are lots of specifics about how you can do this, and I'm sure they will be well covered in this thread.  But the very basic truth is you are spending more than you earn, debt makes up a huge portion of your monthly costs, and you can't dig yourself out until you accept reality that money is a finite resource.

Show your math! Even with the revised budget in the OP, they only have an extra $200 month for debt. That is not going to pay off 231k in debt in 5 years even with snowball...

Also, my point is not to actually make no changes.  My point is paying off this debt is doable on their current income if they can live within their means.  They obviously have not been doing that for a long time.

Your plan of jumpstarting the snowball with the savings is an excellent one, and I agree with selling the cars as well.  But that is not the root of the problem.  The root of the problem is INCURRING debt.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CheapScholar on January 16, 2017, 04:09:48 PM
This is so much debt - and a lot of it debt that could be dischargeable - that you might benefit from talking to a bankruptcy lawyer.

He said he does contract work in finance.  I've heard that filing bankruptcy can make you ineligible for jobs in banking/finance.  Not sure if that's true or not.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GetSmart on January 16, 2017, 04:23:36 PM
It might help to multiply your income by 4  (even if you don't expect to stay at this job), so that it is more easily compared to your wife's income.  I think it's confusing people to look at it this way.

Is there any way you could transfer some other balances to another 0% card?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: With This Herring on January 16, 2017, 05:24:23 PM
I will try not to repeat previous posters too much, but forgive me if I fail.  Here is advice on getting your wife on board (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/), but you two REALLY need to sit down and talk about how much trouble you are in.

My wife and I both have 60 mile round trip commutes to work each day.  I was laid off around 2 years ago and am currently doing contract work in finance and trying to find a full time job.

This is a HUGE amount of time to spend commuting, and it is a HUGE amount of gas and wear-and-tear for your vehicles.  60 miles each?  Why?  Do you and DW work in the same direction?  Can you carpool together until you sell this house and rent within a few miles of work?  (You don't have the assets for a down payment, so I think you have to rent for a while.)

A rough geographic location would help us determine whether a $300K house is bare-bones in your area (such as in NYC) or quite fancy and huge (such as in Smalltown, Midwest State).  What would be the monthly cost of the cheapest two-bedroom apartment in a no-gunshots neighborhood that would put you two close to work?  In my area, you could get a pretty decent place for $800-ish, which would give you guys a little more breathing room until all the debt is paid off.

I am starting a journal to give more background/context on our current life situation and how we got here.  I am looking for help and advice as we begin to dig ourselves out of the pile of debt we have accumulated.

Gross Salary/Deductions/Taxes:

mr. d mrs. d
Gross pay $1,788.75 $7,273.22
Pre-Tax
  Dental $-    $34.00
  Medical $-    $332.00
  Vision $-    $13.00
    Total Pre-Tax: $-    $379.00
Adjusted Gross Income: $1,788.75 $6,894.22
Taxes
  Federal $241.71 $814.76
  State $94.56 $366.00
  OASDI $110.90 $434.96
  Medicare $25.94 $101.72
    Total taxes: $473.11 $1,717.44
Post-Tax
  401(k) loan $-    $565.22
    Total Post-Tax: $-    $565.22
Net Pay: $1,315.64 $4,611.56

I am working an hourly contract position so my take home varies some with non-paid holidays and time off.  The breakdown above is for one week for me and my DW is paid monthly.  Our monthly take home is ~$10k.  I am trying to get a full time job to maximum income.

Please update the income numbers in the original post for you to be estimated per month, not per week.
Are these amounts enough to get you two paid in fully for current taxes?  The IRS will be ticked and less likely to agree to a payment plan on old taxes if you aren't keeping up with new taxes.

Current expenses/budget:

Original Revised
Monthly Monthly Monthly
Expenses Expenses Savings Comments
Cable/Phone $260 $80 $180 Canceling cable - Internet plus Netflix?
Cell Phone $32 $32 $- Verizon Prepaid flip phone
Daycare $490 $490 $-
Dog Wellness Plan $25 $- $25 Cancel
Eating Out $100 $100 $-
Electric/Gas/Water $340 $340 $-
Entertainment $100 $50 $50
Gas $400 $400 $-
Groceries $600 $600 $-
Hair/nails $100 $100 $- Need to discuss with DW
Auto Insurance $81 $81 $- Get quotes
House Cleaning $160 $- $160 Cancel
Lawn care $39 $- $39 Cancel
Medical/Health $30 $30 $- Copays - prescriptions
Pest control $53 $- $53 Canceled
Security $40 $- $40 Cancel
Shopping/Birthdays/Misc $125 $100 $25
Tithing $60 $- $60 Cancel?
YMCA $65 $- $65 Cancel
YMCA Childcare $277 $277 $- Looking for ways to at least cancel early care $114
  Total Monthly Expenses: $3,377 $2,680 $697
Car Pmts $1,040 $1,040 $- Frontier paid off March 2017
Credit Cards $1,405 $1,405 $-
IRS $240 $240 $-
Mortgage $1,986 $1,986 $-
Personal loans $1,941 $1,941 $-
Student Loans $561 $561 $-
  Total Debt Expenses: $7,173 $7,173 $-
Grand Total Expenses: $10,550 $9,853 $697

Our monthly take home pay is ~10k (varies some with my hourly contract job), so with the revised budget it will still be tight. 

I just want to check - Is the first column good, historic data from Mint, YNAB, GnuCash, Quicken, pen & paper, or some other tracking system, or is this what you think you guys are spending?  I don't see clothing (or is it under "shopping?), disability insurance, or life insurance.  I don't see how you guys got so very far into consumer debt.  Is there some large, past expense that you have given up?  Was it just overspending during your unemployment after relying on two huge incomes for years?  Have you been deeply in debt your entire adults lives?

Mortgage:
Principle & Interest = $1,596 (5/1 ARM @ 4.5%)
Taxes & Insurance =      $390
Total monthly =          $1,986

Assets:
Primary residence – Owe $302k, worth ~$315k

How are you not paying PMI when your equity in the house is so low?  Has the value of the home recently dropped?

Autos – Frontier Owe $1k, worth ~$13k
             Pilot owe $25k, worth ~$25k
Cash - $10k
401k - $53k

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187

My thoughts on a plan moving forward (any advice on these or others are appreciated):

1)    Trim the monthly budget even more to free up some cash.  This is going to be a transition for our family as we have lived beyond  our means for some time.  I am all in – the DW is going to need some help though.  The kids will adapt.

2)   Sell the cars and pay cash for used ones.  I know everyone is going to suggest this and I know it needs to happen.  My plan would be to buy a Honda Civic for $4k - $5k for myself and buy the DW a Honda Odyssey for $8k - $9k.  I anticipate my DW is going to freak out though so any suggestions on having that discussion would be appreciated.

Why get a van?  Why not get a second Civic (or Camry or Corolla or or), or some kind of hatchback car if you need the storage space?  You only have two kids.  Just make sure to get a four-door car instead of a two-door, and everyone should fit in just fine.  Until you move closer to work, you two need vehicles with much better fuel efficiency.  DBF just got a 2003 Toyota Echo (35/40 MPG) for $3400 after we scoured CraigsList for a few weeks, and I bet you could find something almost as good.  If you two work in the same city, you could even get by on one car.

3)   Get a full time job to maximize income and then use some of our cash to start paying down debt (highest interest first).  With my employment situation being hourly/contract we have been just trying to make it month to month and kept the cash just in case. 

Again, geographic location would be useful.  Is the local economy something that has prevented you from getting FT work?

So there you have it – our financial mess.  We are drowning in debt and have to begin digging out.  Obviously our primary goal is to get stable and begin paying down the debt.  I have a lot of mixed feelings right now – extreme embarrassment and shame, fear and a little bit of empowerment. 

I have followed the Beatles thread and know the face punches are coming.  I am ready and deserve them all.  However, I am hoping after the punches you guys will pick me back up and support me in this journey.  I am committed to making this happen.  Let the beatings (and then healing) begin…

Well, this certainly is the time of year for case studies!

What are your credit scores?  Would you be able to refinance your CCs and personal loans through SoFi or something similar to get the rates down?  Or take the suggestions of others for more 0% promo rate credit cards?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: khangaroo on January 16, 2017, 06:35:11 PM
Have you heard of Dave Ramsey and The Total Money Makeover? I would suggest picking up the book and reading it.

Also, sounds like your wife is not 100% on the same page as you and this is a major concern. He has a class called Financial Peace University that could help both of you in your dire situation.

Your situation has a lot of moving parts and pieces and I think your best route is to sit down with someone in your circle that has their finances together and walk through your budget with them and work on the debt snowball. The good thing about your scenario is that you have a good HHI so that should help you tremendously with getting out of this pile of debt.

You need a cure for the debt and the best doctor I know for that surgery is Dave Ramsey. I know he sometimes gets ridiculed on this website but his principles work - I can personally attest to that.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: FIFoFum on January 16, 2017, 06:50:25 PM
This is so much debt - and a lot of it debt that could be dischargeable - that you might benefit from talking to a bankruptcy lawyer.

He said he does contract work in finance.  I've heard that filing bankruptcy can make you ineligible for jobs in banking/finance.  Not sure if that's true or not.

There are some employers that wouldn't hire him and some that would (the key is disclosure, of course). Then again, there are many employers that now run credit score checks and wouldn't hire him, even without a bankruptcy on the record. There is definitely a short to medium "hit" in having filed for bankruptcy, but it is something that goes away afterwards. This debt is not going away any time soon.
 
I don't know if bankruptcy makes sense for him. I have no idea what state he is in or what the exemptions would look like. I have no idea how he would do on a means test & what options might be available.

I also don't know how his wife will handle the prospect of bankruptcy. If they are on a Chapter 13 plan, will that create discipline and acceptance of reality that doesn't otherwise exist? Would the recognition that bankruptcy is the only alternative to massive spending cuts then alter behavior or get her on board? 

Anyway, I see a lot of threads where there is no debt too big for our MMM forum to tackle. But the point of bankruptcy law is to let people with certain types of massive debt get a "do over" & that do over can be worth thousands (or hundreds of thousands) of dollars. That's why it makes sense to at least talk to a professional and consider it.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RunningintoFI on January 16, 2017, 06:50:56 PM
Okay.. I just have to ask, did you receive loans from the Mafia?? What sorts of loans are you getting that have interest rates of 35.90%??! That's just outrageous! The snowball effect those sorts of rates can have is mind boggling. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ltt on January 16, 2017, 06:59:54 PM
Life Situation:  Married filing jointly, early 40’s with two kids (8 and 2).  My wife and I both have 60 mile round trip commutes to work each day.  I was laid off around 2 years ago and am currently doing contract work in finance and trying to find a full time job.  I am starting a journal to give more background/context on our current life situation and how we got here.  I am looking for help and advice as we begin to dig ourselves out of the pile of debt we have accumulated.

Gross Salary/Deductions/Taxes:

mr. d mrs. d
Gross pay $7,155.00 $7,273.22
Pre-Tax
  Dental $-    $34.00
  Medical $-    $332.00
  Vision $-    $13.00
    Total Pre-Tax: $-    $379.00
Adjusted Gross Income: $7,155.00 $6,894.22
Taxes
  Federal $966.84 $814.76
  State $378.24 $366.00
  OASDI $443.60 $434.96
  Medicare $103.76 $101.72
    Total taxes: $1,892.44 $1,717.44
Post-Tax
  401(k) loan $-    $565.22
    Total Post-Tax: $-    $565.22
Net Pay: $5,262.56 $4,611.56

I am working an hourly contract position so my take home varies some with non-paid holidays and time off.  The breakdown above is for one week for me and my DW is paid monthly.  Our monthly take home is ~$10k.  I am trying to get a full time job to maximum income.

Current expenses/budget:

Original Revised
Monthly Monthly Monthly
Expenses Expenses Savings Comments
Cable/Phone $260 $80 $180 Canceling cable - Internet plus Netflix?
Cell Phone $32 $32 $- Verizon Prepaid flip phone
Daycare $490 $490 $-
Dog Wellness Plan $25 $- $25 Cancel
Eating Out $100 $100 $-
Electric/Gas/Water $340 $340 $-
Entertainment $100 $50 $50
Gas $400 $400 $-
Groceries $600 $600 $-
Hair/nails $100 $100 $- Need to discuss with DW
Auto Insurance $81 $81 $- Get quotes
House Cleaning $160 $- $160 Cancel
Lawn care $39 $- $39 Cancel
Medical/Health $30 $30 $- Copays - prescriptions
Pest control $53 $- $53 Canceled
Security $40 $- $40 Cancel
Shopping/Birthdays/Misc $125 $100 $25
Tithing $60 $- $60 Cancel?
YMCA $65 $- $65 Cancel
YMCA Childcare $277 $277 $- Looking for ways to at least cancel early care $114
  Total Monthly Expenses: $3,377 $2,680 $697
Car Pmts $1,040 $1,040 $- Frontier paid off March 2017
Credit Cards $1,405 $1,405 $-
IRS $240 $240 $-
Mortgage $1,986 $1,986 $-
Personal loans $1,941 $1,941 $-
Student Loans $561 $561 $-
  Total Debt Expenses: $7,173 $7,173 $-
Grand Total Expenses: $10,550 $9,853 $697

Our monthly take home pay is ~10k (varies some with my hourly contract job), so with the revised budget it will still be tight. 

Mortgage:
Principle & Interest = $1,596 (5/1 ARM @ 4.5%)
Taxes & Insurance =      $390
Total monthly =          $1,986

Assets:
Primary residence – Owe $302k, worth ~$315k
Autos – Frontier Owe $1k, worth ~$13k
             Pilot owe $25k, worth ~$25k
Cash - $10k
401k - $53k

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187

My thoughts on a plan moving forward (any advice on these or others are appreciated):

1)    Trim the monthly budget even more to free up some cash.  This is going to be a transition for our family as we have lived beyond  our means for some time.  I am all in – the DW is going to need some help though.  The kids will adapt.

2)   Sell the cars and pay cash for used ones.  I know everyone is going to suggest this and I know it needs to happen.  My plan would be to buy a Honda Civic for $4k - $5k for myself and buy the DW a Honda Odyssey for $8k - $9k.  I anticipate my DW is going to freak out though so any suggestions on having that discussion would be appreciated.

3)   Get a full time job to maximize income and then use some of our cash to start paying down debt (highest interest first).  With my employment situation being hourly/contract we have been just trying to make it month to month and kept the cash just in case. 

So there you have it – our financial mess.  We are drowning in debt and have to begin digging out.  Obviously our primary goal is to get stable and begin paying down the debt.  I have a lot of mixed feelings right now – extreme embarrassment and shame, fear and a little bit of empowerment. 

I have followed the Beatles thread and know the face punches are coming.  I am ready and deserve them all.  However, I am hoping after the punches you guys will pick me back up and support me in this journey.  I am committed to making this happen.  Let the beatings (and then healing) begin…

Okay, that just seriously made my head spin.  :) Your Frontier will be paid off in March, so take the additional $500+ and immediately throw it at Loan #3...$800+.  When that card is paid off, go after CC #9 for $1,000.  Get rid of those small credit cards---you will feel so much better because you will start to see progress.  Does your wife know how much debt you are in?

Then, you really need to sell the Honda.  You can get a good, used Toyota for half the price of that Honda.  Take that money from the sale of the Honda and apply it to Loan #1, Loan #2, and CC #1.  You are now starting to see more progress.

Then start paying down CC#2 and CC#3.

As far as the other expenses, hair and nails every month has got to go.  Can your wife cut it down, for the time being, to every other month?  Pest control you can easily take care of yourself, so glad you are cancelling.

I say start with that and let us know how it goes.  Keep us posted on how things are going with the debt you are paying down.

And regarding tithing, even though it might be tough to do, I say to cut it back to $25 a month or so.  At some point, you can go back, but right now there are just more pressing items.

 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GetSmart on January 16, 2017, 07:17:55 PM


Quote

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187

I would print this out and post it on the refrigerator and / or bathroom mirror.  (I think that's a Ramsey thing).  It's good to cross out as you pay things off to show your progress and should also make you think twice before spending on anything that isn't absolutely necessary.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on January 16, 2017, 07:31:15 PM
Quote
Have you considered not working (unless you can telecommute), staying at home with the kids, and getting by on one car?
We need my income now just to break even pretty much, so I have never really considered that option.

Ah, didn't realize that the income you posted was weekly, not monthly.  Paying so much in auto loans, childcare, etc. made no bloody sense if your take-home was under $2k/month.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Cpa Cat on January 16, 2017, 07:42:17 PM
The interest on the IRS debt is 4%, so you can list it in order around where the car payments are.

Are there any penalties in there? Do any of them qualify for First Time Penalty Abatement? All you need to be a first timer is a clean three year penalty history.

So for example, if your debt included a penalty from 2015 and a penalty from 2014, but you hadn't occurred any penalties (not including estimated tax penalties - you can have those) in 2013, 2012 or 2011, you'd qualify to get 2014's penalty removed. All you have to do is write and ask them for it.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SwordGuy on January 16, 2017, 07:46:09 PM
You've got the income part of the equation solved, you just need to get the spending problem solved.

First of all, I would suggest that you really lead the way.   Cut your own spending until it hurts.   And stick with it.
And smile and joke.  Be fun, funny, and a wonderful, loving husband and father while you do it.

If your wife wonders about the change, tell her you want to grow the character necessary to be worthy of her.   That's why you're making these sacrifices, for her and your family.

That may help motivate her to come around and do her part in full, too.

If you make the spending changes people have suggested, you'll work your way out of debt in a reasonable time and into full financial security even faster.   

If you just make the changes in your full control and your wife just curbs her spending, but doesn't make the sacrifices she should make, it will take you longer to get out of debt.   And you'll know your wife has yet to grow up.   

If you can get those cars replaced with two low mileage, high mpg vehicles the extra $1000 a month, plus the other $900-$1000 of low hanging fruit in your budget, that debt will start to disappear.  Just at a rough glance, you could pay off Loan #1, Loan #2, CC #9, CC #2, and CC#3 with those changes.

Take in a lodger in a spare bedroom and you could  also pay off CC #1 and CC #4.   

By that point you'll have another $700 or more in freed up loan payments each month to toss at your debt, and that's without a lodger.   That's an extra $30,000+ on your debt the next year.   Make it $36,000+ with a lodger.

Best of luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Easye418 on January 16, 2017, 08:06:23 PM
Holy moly.
Listen to these people.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: marty998 on January 16, 2017, 08:20:31 PM
Hopefully you can bring your wife here... will be so much easier if the both of you are on board.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on January 16, 2017, 08:50:35 PM
This might be an unpopular suggestion, but would your wife go for leasing a more efficient  car and selling the Pilot?  Might be too many miles with the commute, but a 35+ mpg car on a sub 200 lease would save a lot of money between payments and fuel without making her feel like she's driving an old clunker.  Not the best solution, but would help your cash flow situation while you knock out those most usurous debts.

Take some of your cash and pay that 35% interest debt.  I think that's the highest I've seen!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Shwaa on January 16, 2017, 08:52:30 PM
All good advice above, although I am not sure I agree with those saying to sell the Frontier.  Frontier's are super reliable, like Tacoma's.  If this truck has been trouble-free I am not sure I would risk selling it and buying a "used Honda" or something similar.  You never know what troubles you could inherit.  Yes it's not great on gas mileage, but I would attack your commute first before ditching that truck, i.e. see if you can carpool some days at least, find a job closer etc.

Agreed on getting rid of the Pilot though. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: JLee on January 16, 2017, 08:57:37 PM
This might be an unpopular suggestion, but would your wife go for leasing a more efficient  car and selling the Pilot?  Might be too many miles with the commute, but a 35+ mpg car on a sub 200 lease would save a lot of money between payments and fuel without making her feel like she's driving an old clunker.  Not the best solution, but would help your cash flow situation while you knock out those most usurous debts.

Take some of your cash and pay that 35% interest debt.  I think that's the highest I've seen!

Way too many miles for a lease. We're looking at ~15k a year in commuting alone, plus anything else.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 16, 2017, 09:08:13 PM
How far are you into the 5/1 ARM?  That's a fairly concerning liability to me, especially considering the rate.  Do you know if you qualify for a 30 year fixed on that amount?

The description of buckling down followed by relapsing to your previous spending habits is why I think stabilizing your budget is imperative before you tackle the debt.  When is the last time you used the credit cards?  Your "current" budget before the revisions still has you spending more than you earn by $700/month, and the revised budget has you spending every dollar you earn on debt minimums and living expenses.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: JLee on January 16, 2017, 09:23:25 PM
All good advice above, although I am not sure I agree with those saying to sell the Frontier.  Frontier's are super reliable, like Tacoma's.  If this truck has been trouble-free I am not sure I would risk selling it and buying a "used Honda" or something similar.  You never know what troubles you could inherit.  Yes it's not great on gas mileage, but I would attack your commute first before ditching that truck, i.e. see if you can carpool some days at least, find a job closer etc.

Agreed on getting rid of the Pilot though.

Yes, I really love my Frontier and have had zero issues with it at 101,000 miles and still have not had to put new brakes on it!  It will be paid off in March and will be the first vehicle that I have actually owned outright in my life!  I know that is sad.  Cars have been a big part of my problem - always trading for a new one or leasing ones when I was younger. 

I do worry about selling it and getting an older Honda and then having issues that will need a cash outlay.  But I know the equity in it could be used to pay off another debt.

Add up your car payments and vehicle maintenance since Oct 25, 2015.

Here is what I have into my 2006 Mazda. I removed performance parts that I bought, decided not to install, and am selling (so far at a profit). Note this includes two new sets of tires (winter and summer), as well as another set of wheels.

10/25/2015   Purchase price   $6,000.00
10/25/2015   Dunlop Winter Maxx tires   $542.50
10/26/2015   Tire install, alignment/AC/lug nuts   $300.00
10/28/2015   Wipers/cabin air filter   $49.22
11/3/2015    GROM stereo adapter   $132.99
12/27/2015   ATF/PS fluid, oil filter   $10.44
12/27/2015   Oil (12qt Mobil1 5w30)   $59.90
01/10/2015   oil change @ 129,423   $0.00
03/13/2016   tire rotation @ 131,677   $0.00
08/23/2016   HVAC controls    $30.00
09/14/2016   Sumitomo HTR ZIII tires   $458.88
09/20/2016   RX8 wheels and center caps   $219.99
09/20/2016   Sumitomo HTR ZIII's mounted/balanced   $60.00
09/20/2016   Summer tires installed @ 132,595   $0.00
09/29/2016   Taillight   $46.65
10/3/2016    Trunk carpet   $65.00
10/04/2016   Bosch oil filter, ATF   $19.24
10/04/2016   oil change @ 133,754   $0.00
11/18/2016   Snow tires installed @ 135,367   $0.00
12/31/2016   ATF   $5.34

Just about exactly $2,000 -- and half of that was tires that will be good for several years.  How much were your car payments plus maintenance?

That said, I'm not sure I would sell the Frontier.  The Pilot, on the other hand...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: bugbaby on January 16, 2017, 09:30:28 PM
First off, I'm stunned & confused . . . is this MMM or Yahoo Spendypants Fake Finance?   How can anyone even mention bankruptcy when OP is splurging on cable, lawn care, housecleaning, hair/nails??? 

 Whatever happened to "financial freedom via badassity" of cutting spending, getting rid of car loans, side hustles and the like? 

Sent from my Nexus 5 using Tapatalk

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ltt on January 16, 2017, 09:34:09 PM
I don't think you should sell the Frontier because it will be paid off.  Do you have a lot of debt, yes, but you can't get rid of everything--I don't think that's realistic.  Some things have to be done in baby steps and not one big, fell swoop.  So, start with the Honda.  Find a good, used Toyota Corolla or something comparable.  Just start with selling one vehicle, not both.  Even the used Hondas are still quite pricey.  You could probably get a 2 to 3 year old Corolla still with fairly low mileage for 1/2 the price of that Honda and put the other 1/2 of the money towards the credit card/loan debt.  They are a lighter vehicle, not necessarily great in the snow in the winter, but you can get around 250,000 miles.  I don't know if you live in a warmer or colder climate.  Or you could get a Toyota Rav4 which is more of a small SUV.  You would probably have to buy a little older.

   
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: JLee on January 16, 2017, 09:39:00 PM
I don't think you should sell the Frontier because it will be paid off.  Do you have a lot of debt, yes, but you can't get rid of everything--I don't think that's realistic.  Some things have to be done in baby steps and not one big, fell swoop.  So, start with the Honda.  Find a good, used Toyota Corolla or something comparable.  Just start with selling one vehicle, not both.  Even the used Hondas are still quite pricey.  You could probably get a 2 to 3 year old Corolla still with fairly low mileage for 1/2 the price of that Honda and put the other 1/2 of the money towards the credit card/loan debt.  They are a lighter vehicle, not necessarily great in the snow in the winter, but you can get around 250,000 miles.  I don't know if you live in a warmer or colder climate.  Or you could get a Toyota Rav4 which is more of a small SUV.  You would probably have to buy a little older.

 

A Corolla with snow tires will be awesome in snow.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: khangaroo on January 16, 2017, 11:07:59 PM
You need some motivation man!! Here's the Dave Ramsey video that got me pumped up for getting out of debt: https://www.youtube.com/watch?v=imBjHvIlou4&t=769s

Sounds like you've tried but just haven't been able to stay on the horse. Only when you get sick and tired of being sick and tired will you be able to get out of this mess.

One of my favorite quotes: "If you want something bad enough, you'll find a way. If not, you'll find an excuse" - Jim Rohn. You gotta want financial independence like your next breathe. Just think about how much wealth you can build with your $160k+ HHI!! That's a ridiculous amount of money that is being squandered. Everybody can give you all the tips, plans, budget apps, and wisdom but if you don't change your attitude about your debt, you're in for a financially stressful life (as you have figured out).

Here are your loans from smallest to largest. You can knock out 10+ of those things in a year if you get on a budget and limit your spending. If you buckle down and get serious, I bet you can be debt free in 3-4 years - you just gotta have a strong WHY. Do it for your kids. Do it for your future self. For your wife. Being able to pay for 100% of your kids college. Paying cash for your dream car. Early retirement. It's a marathon but it's so, so worth it.

Get the debt snowball rolling on this thing!!

Name   Amount
Loan #3   $882
CC #9   $1,000
Auto #2   $1,172
CC #7   $2,032
CC #2   $2,279
Stu.L #3   $2,508
CC #1   $2,588
Stu.L #2   $4,066
Loan #2   $4,278
CC #5   $4,376
Loan #1   $4,676
CC #3   $7,997
CC #4   $8,447
CC #8   $16,662
IRS          $17,290
CC #6   $17,711
Auto #1   $25,868
401K    $27,743
Loan #4   $31,148
Stu.L #1   $49,036
Total:   $231,758

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: marty998 on January 16, 2017, 11:57:49 PM
First off, I'm stunned & confused . . . is this MMM or Yahoo Spendypants Fake Finance?   How can anyone even mention bankruptcy when OP is splurging on cable, lawn care, housecleaning, hair/nails??? 

 Whatever happened to "financial freedom via badassity" of cutting spending, getting rid of car loans, side hustles and the like? 

Sent from my Nexus 5 using Tapatalk

I agree. Bankruptcy for consumer debt basically teaches the lesson "it's ok to fuck up financially and just walk away leaving everyone else to clean up the mess".

Pay your debts and learn lessons that will stop you from doing it again.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: galliver on January 17, 2017, 12:12:45 AM
I've been playing with your numbers over here because I'm a massive nerd.

I think you're a perfect candidate for the Dave Ramsey snowball method (balances smallest to largest instead of highest to lowest interest), because it will only extend your repayment by 1 month, and it will be much more motivating. Here's my spreadsheet...balances on the left, payments on the right. I know it's messy. I'm sorry. https://dl.dropboxusercontent.com/u/4115375/MMM_CS_231k.xlsx (No intentional viruses I promise.)

->It will take you only 1 extra month (51 vs 50 months) to pay off your balances smallest-->largest instead of by interest rate. It will cost you $5k extra (out of ~260k total) to pay your balances this way. This is 2%.
-> HOWEVER, you will pay off a balance and free up money EVERY 2-3 months for most of your journey with the DR method.  In the first 3 months, you'll free up $800 from minimum payments! After 6 payments, you'll have 928 free...and so on, 100-200 every couple months! Given what you've said about trouble with motivation, this seems like it would be worth the 2% total hit for you...
-> This will ONLY work if you carry out your budget as listed and keep putting the SAME TOTAL $$ toward debt the entire time. If those first $800 crawl back into your household budget instead of staying in debt repayment, you'll extend the timeline by almost a year and pay $13k more interest (on top of the $5k extra from using the DR plan vs IR plan)! Furthermore, that third payoff that should happen in 6 months will take you almost 2 years to reach, increasing the chances you'll get discouraged!
->If you carry this out, in 5 years you'll be debt free and used to living on HALF your income (or less if you get raises). You'll be all set to save like a Mustachian!

-->So to reiterate: You'll hit lots of milestones and hopefully stay motivated if you STICK TO IT! :)

----

Now, as far as getting fast food/takeout: it's a fact that it's hard when you both work and I imagine it's SO much harder with kids! I think it helps to have a go-to list of budget-friendly, low-effort options. Ours are: frozen dumplings (ravioli, potstickers, pierogis, etc), pasta w/ sauce from a jar, and frozen pizza. When we're feeling health-conscious but lazy, we add a quick salad. I also like rice bowls...I'll make a batch of sushi rice (20 min) and while it's cooking either prep crabsticks/cucumbers/avocado or omelet/sauteed kale/mushrooms (It's more an "I don't want to think" meal than an "I don't want to cook" meal).  Anyway, I find having these mental shortcuts changes the conversation from "I'm lazy, takeout?" to "I'm lazy...is takeout REALLY worth it or is pizza (etc) ok?" For the record I'm by no means perfect...but I think that qualifies me *more* to speak to what works for imperfect people :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Villanelle on January 17, 2017, 01:29:58 AM
Your wife is opposed to selling your excessive McMansion?  (And yes, 2900 sqft is definitely excessive, even if you weren't drowning in debt.)

Sorry, but tough shit for her. You have both made choices that mean you can't afford that house.  Full stop.  Is she opposed to not flying to Europe 4 times a year and staying at the Ritz?  You don't get to be opposed to not doing things you can't afford.  I'd ask her to look at the budget and tell you where the money will come from if not the house.  If she can't do it (and she can't), then the house goes.  You say it's a median cost/size for your area.  That's a ridiculous rationalization.  If everyone else was heating their home by burning $100 bills, it would still be stupid for you to do it.  And downgrading to "only" burning $20s wouldn't make your actions less stupid, even though they looks slightly less asinine compared to your neighbors.

She needs to see this is an emergency.  In addition to asking what her alternative suggestions are (to selling house and cars), I'd also ask her if she'd like to be able to help pay for kids' college (if that's something that's important to her), or for their weddings, or for their school sports, more than she wants to stay in that house.  And would she like to spend time with grandkids when she's 65, or be too busy because she's working full time. Appeal to what's important to her.  If it's not these things I mentioned, figure out what is, and show her the budget so she understands she is choosing the fancy house over time with the grandkids, or with being able to have time to travel when you are older, or whatever it is she values. 

Also, depending on the timing and terms, you could be in for an even bigger mess when that ARM starts adjusting, making all this even worse.

In your shoes, I'd be considering really dramatic things, like a roommate or an exchange student (from a program that actually pays you to house a student). 

Look at Lending Club and see what your rates would be and if you could get loans to pay off some of your higher rate debts, while still being able to afford the monthly payments.  >30% is insane.  Also consider zero balance card transfers, but be careful with that is you need to keep careful track and make sure you meet the terms.  But it might be worth it for at least the highest interest debts.  Of course, you might not qualify for cards, but it's worth looking in to.

Read the linked post about getting your partner on board.  But if you can't do that, you are pretty much screwed, unfortunately. Not just because you can' make changes to tap some of your equity, but because that means it's very unlikely she will stop the behaviors that ended you up here.  It's very unclear how you ended up that far in debt, with the budget you posted, so I suspect there are a lot of things that have been left out.   
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: rpr on January 17, 2017, 02:14:50 AM
Getting out is possible and doable. What you will likely need to do is to watch your spending closely. Do you really have the $700 extra as you listed in your modified budget? If so, doing the debt snowball may just possibly get you out of this crushing debt in under 5 years if you stay focussed.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Sapphire on January 17, 2017, 03:27:45 AM


Quote

Liabilities:

Total Monthly
AmountRatePaymentComments
Loan #1$4,67635.90%$177
Loan #2$4,27827.98%$194
CC #9$1,00026.24%$41
CC #1$2,58825.99%$28
CC #2$2,27924.99%$72
CC #3$7,99724.49%$198
Loan #3$88220.00%$284
CC #4$8,44715.49%$231
CC #5$4,37614.90%$109
Loan #4$31,14810.75%$720
Student loan #1$49,0366.88%$368
Auto loan #1$25,8684.09%$515Honda Pilot
Auto loan #2$1,1723.84%$525Nissan Frontier
Student loan #2$4,0663.63%$86
401K loan$27,7433.25%$565
Student loan #3$2,5082.75%$108
CC #6$17,7112.00%$3395-year pmt plan
CC #7$2,0320.00%$78
CC #8$16,6620.00%$3095-year pmt plan
IRS $17,290 $240Requesting 72 month pmt plan
Total:$231,758 $5,187

I would print this out and post it on the refrigerator and / or bathroom mirror.  (I think that's a Ramsey thing).  It's good to cross out as you pay things off to show your progress and should also make you think twice before spending on anything that isn't absolutely necessary.

This ^^^ is a good idea.  It doesn't sound like your wife appreciates the full extent of your situation.  Maybe print out the debts, smallest to largest (as someone has already done), with a bit of commentary about how the less obvious debts were incurred (eg, holiday, Xmas presents etc).  Then with the big total at the end.

Print it out in very large font so it is a bit "in your face". 

Sometimes we can fool ourselves into thinking a situation is not as bad as we thought if we can "skip over the figures" and not see a total.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on January 17, 2017, 03:37:01 AM
First off, I'm stunned & confused . . . is this MMM or Yahoo Spendypants Fake Finance?   How can anyone even mention bankruptcy when OP is splurging on cable, lawn care, housecleaning, hair/nails??? 

 Whatever happened to "financial freedom via badassity" of cutting spending, getting rid of car loans, side hustles and the like? 

Sent from my Nexus 5 using Tapatalk

That's because we assume that the OP would prefer to stay married, and his wife needs some time to come along.  Stopping the bleeding is the first step.

OP, I would seriously consider selling the house if you can, and moving way closer to work, even if that means an apartment.  That opens up more opportunities for sharing a car, a lease like I mentioned, less gas and less utilities, even if rent = your  current mortgage.  Plus a commute like that is about the worst thing you can do for your mental and physical health, and takes away from time with your kids.  You have a lot of work to do to dig out of this, save college funds if you plan to do that, build some equity in a smaller property (Yay, you live somewhere that a small house would be fairly lowpriced!) And save fore retirement.

I still say sell the truck.  Even if it's reliable, gas and maintenance are more than on a small car.  If you're worried about reliability, look at getting a lower mileage economy car.  Your Titan already has 100k on it, so if and when it breaks, that will be more $$ to fix than a Yaris that incurs a similar issue. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ShoulderThingThatGoesUp on January 17, 2017, 03:45:27 AM
If you can charge it at home and work, selling the truck and buying a used EV could net you a few grand and save you immense amounts of fuel. An extra $180 a month would really help you.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MoonLiteNite on January 17, 2017, 04:05:01 AM
To keep a simple reply.
Nice work on trying to make cuts, you can always do better though. Sell cars, downsize house, move closer to work, ect...

Next, you need to get those CC paid off ASAP.
The math way is to make min payments on all, execpt the highest %, and pay ONLY into that one. Any loans that you can "pause" and not paying anything, do that. If you can pause your student loans, personal loans, or even pause or lower min payments to some CC, do it! Just start paying the highest APR.
Then i saw others saying it, Dave Ramsey's way, by paying off small debts FIRST. If your problem is being motivated then maybe this method is for you. By the numbers it is stupid, but for some people just crossing off the debts every month can really help keep you going.

And mad props for NOT wanting to screw over your lenders!

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on January 17, 2017, 04:33:29 AM
You can't do it alone. Take a deep breath and show this to your wife. Ask her to suggest solutions. It will be ugly, you will have to make some serious changes to sort this out. Sell the cars, sell the house. Simplify everything.

I am now really curious how did you end up in this pickle with that sort of income? You will need to tackle the behaviour problems which resulted in this. What did you buy?

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MrsDinero on January 17, 2017, 05:22:42 AM
How opposed do you expect your wife to be about getting your financial health in order?  Does she know you're on here seeking advice?
I do not think she is that opposed to getting our finances in order.  She is very concerned about our lack of saving for retirement and college for our kids.  I think I just need to show her how much in trouble we really are and that could help her get more on board.  She does not know I am on the Forum seeking advice yet.  I am fairly new to MMM and she is not aware of the blog at all.  I want to find a way to introduce her to all of it so she has a better idea of where I am coming from with all this.

Why get a van?
If my wife is ever willing to get rid of the Pilot, I am not sure I can persuade her to get a sedan.  The funny (or not so funny really) thing is we had an Altima that would be paid off in March, but traded it for the Pilot when baby #2 arrived.  You know because everyone with 2 kids just has to have a SUV.  Terrible decision!  That is one of my patterns it seems…my gut says terrible choice but I end up doing it anyway. 
You can convince her because these 2 points are related. With your current situation she can either have the fancy car or a future of financial security but she cannot have both.  She needs to decide which is more important.

Quote
60 miles each?  Why?  Do you and DW work in the same direction?
Yes, I hate the commute but would probably earn $25k less in our area.  We work around 15 mins from each other, but are on different work schedules.  However, this is something we should look into. 
Is is possible to convert the job into a telecommute job.  This would drop all commuting costs and could allow you to become a 1 car family.

Before deciding no you cannot do this, I would calculate the total cost of the commute, including the time you spend in the drivers seat. 

You still have a lot you can trim, gifts, entertainment, personal expenses, etc.

I'm a big fan of living on 1 person's income even (especially) if both spouses are working.  If I was starting at numbers like yours, I would set up a challenge for myself to get as close to paying all normal bills on 1 income, then use the other person's income to focus on debt. 

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Unique User on January 17, 2017, 06:07:51 AM


Have you heard of Dave Ramsey and The Total Money Makeover? I would suggest picking up the book and reading it.

Yes, in fact I got his book several years and listened to his show daily for a while.  One of our problems is we would get all pumped and ready to budget and attack the debt and just fall off the wagon a month or so later.  It is a bad pattern we have developed.  A big part of it is my fault…I say we are going to cut back on eating out and then a week later bring home take out or we go out.  My wife sees that and thinks well he isn’t committed so why should I stick to the Shopping budget this month and we are off to the races.  A vicious cycle we have to stop.

Learn to cook on Saturdays or Sundays.  We'll cook extra for each meal and/or prep things on the weekends so that during the week is easier.  I'm a big fan of reheating during the week, here is a good thread to look at.  http://forum.mrmoneymustache.com/share-your-badassity/made-entire-weeks-worth-of-meals-on-sunday/  I agree it is hard not to fall into the take out trap, but having a fridge/freezer/pantry well stocked with already prepped items or easy meals makes it much easier to not fall into that trap.  This forum has a ton of threads that can help you on that front. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ltt on January 17, 2017, 06:53:26 AM
We used to do the 60+ mile commutes when our kids were young--close to 2 decades ago.  I agree with previous poster; after a while it can be really draining; people are just so tired at the end of the day with long commutes.  We finally moved and bought a house close to where my husband's employer is located.  Now my husband has a very short 10-minute round-trip "commute" each day.  I do think it really helped us financially, as well as mentally, long-term.  Once you start paying down your credit and loans and start getting closer to financial independence, you might want to look at another job/position closer to home.  From the other posts, sounds like you can knock this debt down in about 5 years. 

As for the post on the fast food, typical meal cost to pick up fast food for the four of you is costing around $25.  The thing about fast food is that you can pretty much make the same "fast food" meal at home for half the cost.  Buy a small fryer; they don't cost very much.  You can make french fries, onion rings, whatever it is you like in the fryer.  You will need to change the oil in it regularly, but it's very handy when neither of you has the energy to cook a meal after a long commute.  Try out some of the different frozen chicken sandwiches, nuggets, etc., and see which ones you like.  Some of the frozen pizzas are fairly decent also at a fraction of the cost of what you would pay at a pizza place.  Just try them out and see which ones you like.  That way when you do find one you like, stock up on them, so you will have them for those nights neither of you feels like cooking.  Remember, baby steps.  You will eventually find ways to simplify meal prep.  Do some prepping of meats on the weekends.  Make up some soups which can be frozen.  One of the easiest types of soups to do is the "dump" soups.  If you don't want to make from scratch or simply are hindered by lack of time, simply buy several varieties of canned chili, chicken noodle soup, etc.  You can then take the cans of the chili, let's say, and dump them together, heat, and you have an easy meal.  Have a salad with it.  Leftovers go to work with you for a meal or freeze.  As you start prepping more meals at home, I do believe you will eventually switch over to homemade foods.  It will take some time to get there, but you will be on your way.  There are lots of ways to do this.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on January 17, 2017, 07:07:01 AM
Your wife is opposed to selling your excessive McMansion?  (And yes, 2900 sqft is definitely excessive, even if you weren't drowning in debt.)

Sorry, but tough shit for her. You have both made choices that mean you can't afford that house.  Full stop.  Is she opposed to not flying to Europe 4 times a year and staying at the Ritz?  You don't get to be opposed to not doing things you can't afford.  I'd ask her to look at the budget and tell you where the money will come from if not the house.  If she can't do it (and she can't), then the house goes.  You say it's a median cost/size for your area.  That's a ridiculous rationalization.  If everyone else was heating their home by burning $100 bills, it would still be stupid for you to do it.  And downgrading to "only" burning $20s wouldn't make your actions less stupid, even though they looks slightly less asinine compared to your neighbors.

. . . .

Also, depending on the timing and terms, you could be in for an even bigger mess when that ARM starts adjusting, making all this even worse.

. . . .

This.  It's the "and" problem again - you work hard at your job and make a good income and think that means you deserve a nice house with a nice yard and two nice vehicles and manicures and [insert next want here].  But it's really an "or" -- no one can really afford everything they want, because if you try, you will find there is always something newer/better/fancier that you just have to have.  You are paying 35% interest to maintain a charade.

For me, it's the car thing - I truly cannot fathom four figures of monthly car payments - even when we were DINKs making your income, we never paid more than $300/month over a three-year term.  But YMMV - if your DW realyreallyreally loooooves having a Pilot, then something else has to go.  Like the house.

Actually, that was the discussion for a few years ago.  When you have as much debt as you do now, at those interest rates, you can't afford any of it.  You've been propping up your lifestyle for so long with high-interest debt that you really need to rethink everything - you may have to go back to living like students for a couple of years to get back on track.  Nothing can be sacred.

Also, I would assume that you only have until your mortgage re-sets to get this figured out and paid off.  I am assuming that you took the 5/1 ARM because you needed that to make the payments affordable (again, tipoff that you can't afford it).  I have trouble thinking that any regular lender is going to be willing to refinance that into a 30-year with your current debt loads, at least at any kind of normal/reasonable interest rate.  So what's your plan for when your mortgage jumps because all you can get is a subprime loan?  OTOH, if you get that debt paid back ASAP, not only will you qualify more easily for a loan, but your credit score will rise and you will get better terms.  So do you want the lose-lose or the win-win?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Suit on January 17, 2017, 07:35:46 AM
One thing that I wanted to point out is something that you said earlier OP, that you and your wife would be on board but then you would get take out or eat out and your wife would follow suit and not cut back. YOU are the leader! So lead. I suggest leading with expenses that are related to yourself and the household like organizing meal prepping for the week by looking at grocery store flyers for deals, doing the grocery shopping and cooking or packing freezer bags for crock pot meals and not eating out, etc. Show her that the money that you are saving the family is going to debt then it sounds like your wife will follow with fewer nail/hair appointments, shopping, etc.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: swick on January 17, 2017, 05:57:01 PM
One thing that I wanted to point out is something that you said earlier OP, that you and your wife would be on board but then you would get take out or eat out and your wife would follow suit and not cut back. YOU are the leader! So lead. I suggest leading with expenses that are related to yourself and the household like organizing meal prepping for the week by looking at grocery store flyers for deals, doing the grocery shopping and cooking or packing freezer bags for crock pot meals and not eating out, etc. Show her that the money that you are saving the family is going to debt then it sounds like your wife will follow with fewer nail/hair appointments, shopping, etc.

This is a great suggestion and much appreciated.  I have to take the lead on this and I know she will respond and commit as well.  In fact, she will probably be as good if not better at it than I am once she sees I am finally serious about it.

This is super encouraging. Check out this threadhttp://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/ (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/), it is pure gold.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on January 17, 2017, 06:24:16 PM
How far are you into the 5/1 ARM?  That's a fairly concerning liability to me, especially considering the rate.  Do you know if you qualify for a 30 year fixed on that amount?

The description of buckling down followed by relapsing to your previous spending habits is why I think stabilizing your budget is imperative before you tackle the debt.  When is the last time you used the credit cards?  Your "current" budget before the revisions still has you spending more than you earn by $700/month, and the revised budget has you spending every dollar you earn on debt minimums and living expenses.

The ARM resets in 2019.  I am pretty sure we cannot qualify for a 30-year fixed at this point given my credit and DTI. 

I would be totally fine selling the house and renting to help speed up the debt elimination, but I would need to get the wife on board.

This is good information!  Now you know how long your window is to clear out that pile of CC debt!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on January 17, 2017, 06:37:52 PM
One thing that I wanted to point out is something that you said earlier OP, that you and your wife would be on board but then you would get take out or eat out and your wife would follow suit and not cut back. YOU are the leader! So lead. I suggest leading with expenses that are related to yourself and the household like organizing meal prepping for the week by looking at grocery store flyers for deals, doing the grocery shopping and cooking or packing freezer bags for crock pot meals and not eating out, etc. Show her that the money that you are saving the family is going to debt then it sounds like your wife will follow with fewer nail/hair appointments, shopping, etc.

This is a great suggestion and much appreciated.  I have to take the lead on this and I know she will respond and commit as well.  In fact, she will probably be as good if not better at it than I am once she sees I am finally serious about it.

This is another reason I think you need to sell your truck.  Get a decent used car and after a couple months see how she feels about getting rid of the Pilot.  Maybe try to carpool in the replacement car in the meantime and see how much it helps the gas bill.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GetSmart on January 17, 2017, 07:17:34 PM
Quote
Loan #3   $882
CC #9   $1,000
Auto #2   $1,172
CC #2 $2279

You might consider taking $5300 from your current cash and wiping out these 4 debts.  These four equal $922 in monthly payments to snowball forward and would give you a jumpstart. 

Then you might arrange the rest in order of highest interest to lowest.  In the meantime call each card and ask for a rate reduction.  If your wife can qualify for a 0% balance transfer you should try to push the higher balance and higher rate cards to this.  The trick is to apply for several at once so as not to ding the credit rating - Discover is fairly reasonable.

It seems you could easily slash $1000 from your monthly budget by doing the things you already suggested and a few others (food, nails, no eating out, entertainment, gifts and utilities can all be cut by a fair amount - I know it seems hardcore, but that's the way I am!)  And if you slash $1078 - you now have an extra $2k to throw at the debt each month. 

To simplify things: your wife's paycheck covers the mortgage and newly slashed budget for a total of $1986 mort + $2380 expenses = $4366 - 4611 (wife's pay) leaves $245 to replenish the emergency fund.

Your entire paycheck of $5262 goes to the debt.  That would show that you're taking responsibility for it.

Also - give yourself a time limit - maybe 1 year - to be extremely frugal - by the time the year is up you
may just be so used to it that you keep going and find more ways to save. I'm sure you'll get through this - you seem to have the right mindset for it now.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GetSmart on January 17, 2017, 07:51:34 PM
https://www.vertex42.com/Calculators/debt-reduction-calculator.html

Hi - I just saw this calculator over on the Beatles page and thought I'd pass it on. 

I'd be surprised if you qualified for a mortgage at this level of debt.  But everything is worth a shot - might be easier to get rid of the cars first :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: shanghaiMMM on January 17, 2017, 08:02:44 PM
Quote
60 miles each?  Why?  Do you and DW work in the same direction?
Yes, I hate the commute but would probably earn $25k less in our area.  We work around 15 mins from each other, but are on different work schedules.  However, this is something we should look into. 

How different are we talking here? It is completely unfeasible, or merely a slight pain in the arse?

For example, do you work 7am-3pm and she works 9am-5pm? Because if it is something like this, your need to figure out a way to car pool immediately, IMHO.

Both of you join a gym and work out before or after work to kill the 2 hour difference. Get a coffee and read a book. Go for a long walk. Something, anything. 1 car and 1 commute would kill so many of your problems.


Title: Re: Reader Case Study - $231k in debt and need help!
Post by: rpr on January 17, 2017, 08:05:12 PM
The only limitation of the free downloadable version of that  calculator is that it is limited to 10 accounts. There is a paid version that goes unto 20 accounts but I have no experience with it. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: scantee on January 17, 2017, 08:08:16 PM
Rent. In a situation like yours, with a large amount of debt spread out over many different loans, anything you can do to simplify your financial situation is a move in the right direction. On its face renting might seem more expensive, but that is likely because you are not accounting for home maintenance or the opportunity cost of spending your limited free time working on the house.

Renting has so many other benefits too: you can move closer to your jobs and cut down on commuting costs, you'll likely be less tempted to fall into the cycle of continuous and unnecessary home decorating and improvement, and you can use the move to purge or sell things you don't need. My guess is that while renting seems scary right now (maybe due to a loss of status?), once you go through with it you'll feel an amazing sense of relief. It will be one (really big) less thing to worry about and will leave you with more mental energy to focus on addressing your other financial concerns.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: JLee on January 17, 2017, 08:14:30 PM
Quote
60 miles each?  Why?  Do you and DW work in the same direction?
Yes, I hate the commute but would probably earn $25k less in our area.  We work around 15 mins from each other, but are on different work schedules.  However, this is something we should look into. 

How different are we talking here? It is completely unfeasible, or merely a slight pain in the arse?

For example, do you work 7am-3pm and she works 9am-5pm? Because if it is something like this, your need to figure out a way to car pool immediately, IMHO.

Both of you join a gym and work out before or after work to kill the 2 hour difference. Get a coffee and read a book. Go for a long walk. Something, anything. 1 car and 1 commute would kill so many of your problems.
*Bring a coffee. The last thing they need right now is a $120/mo coffee habit!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SwordGuy on January 17, 2017, 08:29:43 PM
So, something that would be helpful for you and your wife:

Make a list of what you personally are going to do to get your family out of this mess.  Make it measureable and tied back to your new budget.

If your wife is on board with anything, include that too.

Write it down.

Format it so you can check off what you've done in each action point in each week for the next 3 or 4 months (whatever will fit on the page).

Put it someplace you and your wife will see it every day.

Post it here for additional accountability.

Mark off each category you successfully achieve at the end of each and every week.

If you fail one category, you have to mark it as a failure that very day.  It needs to be in a bold color so it stands out.

Keep plugging at it.   Hopefully, the advice from the links on how to get your spouse on board will bear fruit and you'll add additional categories that she's going to do.


Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on January 17, 2017, 09:09:58 PM
It looks to me like you've put together a sensible plan for downsizing your life... of course the hard part is sticking with it.  However, SwordGuy made a good suggestion for keeping on track, and you can also join some of the Gauntlet challenges, start a journal, etc. as many here do. 

It's good that you would consider a move to a smaller place closer to work, which could add so many hours to your lives. I would guess that one of your wife's objections might be that your oldest child would have to change schools and friends, correct?  That's what I would worry about. On the other hand, with so much more time every day (up to 4 hours more of parent time a day! depending on how close you move) your children will thrive. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: lemanfan on January 17, 2017, 11:13:15 PM
Luckily I do not drink coffee...soda is a problem though...

Cost is not the only reason to cut down on sugary drinks.  ;)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: obstinate on January 18, 2017, 12:10:46 AM
Personally, I would definitely take the time to consult a bankruptcy attorney and at least get a sense of the upsides and the downsides.

But before doing that, I would fix the spending issue that got you into this situation. Your net pay is plenty to cover your expenses without the ~200k of deadweight. But you got that debt somehow, and if your system has not changed, you'll be back in the same hole after a few years.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: bonjourliz on January 18, 2017, 04:41:48 AM
Beyond all the steps, you need to find a way to motivate your family to stick to the plan.  Was it Your Money or Your Life that encouraged a big wall chart, where you color in your debts getting paid off and your net worth increasing?  Something big and in your face, but positive. 

Also set a goal for finding money each month.  Can you find $200 a month?  Think selling household items, picking up odd jobs (babysitting?), carpooling...  That would put your time to productive use, and also bring in a cushion so that your goals are attained even in months where you encounter hurdles. 

Finally, make a list of no nonsense meals to eat on days that you are just done.  Post it somewhere visible and make sure you have those ingredients on hand at all times.  (Ideally the menu would be foods that don't go bad fast.) Like with eggs, potatoes, and bread (keep a loaf in the freezer), you could have a breakfast meal, egg salad sandwiches, baked potatoes....  Make it as simple as picking up take out. 

Good luck to you.   

Sent from my BLU R1 HD using Tapatalk

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Iplawyer on January 18, 2017, 05:25:31 AM
First off, I'm stunned & confused . . . is this MMM or Yahoo Spendypants Fake Finance?   How can anyone even mention bankruptcy when OP is splurging on cable, lawn care, housecleaning, hair/nails??? 

 Whatever happened to "financial freedom via badassity" of cutting spending, getting rid of car loans, side hustles and the like? 

Sent from my Nexus 5 using Tapatalk

I agree. Bankruptcy for consumer debt basically teaches the lesson "it's ok to fuck up financially and just walk away leaving everyone else to clean up the mess".

Pay your debts and learn lessons that will stop you from doing it again.
It has also been restructured so it is almost impossible to walk away without paying a lot of this. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on January 18, 2017, 06:51:47 AM
Beyond all the steps, you need to find a way to motivate your family to stick to the plan.  Was it Your Money or Your Life that encouraged a big wall chart, where you color in your debts getting paid off and your net worth increasing?  Something big and in your face, but positive. 

Also set a goal for finding money each month.  Can you find $200 a month?  Think selling household items, picking up odd jobs (babysitting?), carpooling...  That would put your time to productive use, and also bring in a cushion so that your goals are attained even in months where you encounter hurdles. 

Finally, make a list of no nonsense meals to eat on days that you are just done.  Post it somewhere visible and make sure you have those ingredients on hand at all times.  (Ideally the menu would be foods that don't go bad fast.) Like with eggs, potatoes, and bread (keep a loaf in the freezer), you could have a breakfast meal, egg salad sandwiches, baked potatoes....  Make it as simple as picking up take out. 

Good luck to you.   

Sent from my BLU R1 HD using Tapatalk

This is the most powerful argument for downsizing the house and the cars.  If you realize you both have problems with impulse spending/treats, you need to keep your fixed costs as low as possible so getting takeout or a trip to the mall doesn't derail you entirely. 

Sell.  Rent -- that 5/1 ARM doesn't even begin to cover the true cost of owning (you are paying an artificially low rate for a few years and hoping you can refinance to something reasonable at the end of it), and you can't afford the risk of rising interest rates/higher payments until you have your entire house in order.  Look at the rental as paying your dues to "earn" that nicer house that you guys want.  Put that debt payoff calendar on the fridge, look at it every day, celebrate (cheaply!) every time you cross off another line.

I also think you guys need to live a much more minimal lifestyle for a few years for psychological reasons.  Your debt suggests that you significantly overestimate the kind of lifestyle your salaries can actually afford.  Going bare-bones for a couple of years will help you re-set those expectations.  Then, once you are back to even, you will see the house and the cars as privileges, not entitlements, and will be in a better mindset to choose which of those luxuries are worth the amount of work you need to put in to pay for them.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on January 18, 2017, 08:56:36 AM
I'll just add a ray of hope to this duscussion.  OBviously there's a huge mountain to overcome, and one member's debt-payoff calculations have you paying this off for about 4 years until you are "debt free."

But (ray of hope time) - your family's has an enormous income and you are still relatively young. Make large-scale changes in 2017, stick to them, and you could actually be completely FI and retired in 10 years.  If I remember correctly you'll be in your early 50s then and your kids will still be in middle-school.

It could be a long-term goal to shoot for, and the ultimate "carrot." Might seem impossible now but the math says this could be very doable if you make changes this year and stick to your new lifestyle.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: honeybbq on January 18, 2017, 09:22:46 AM
Welcome. Sounds like you've got a lot on your shoulders and have some tough decisions to make.

However, I'm looking at your list and I see an unhealthy relationship with shopping, credit cards, spending, etc. We can fix the numbers for you, but you are going to need to fix whatever hole you were filling with all that... STUFF. A 40% loan must be a check-into-cash place or something, which indicates to me there is a HUGE money management and want/need unbalance. It is ok to be committed here and say you are sick of the debt, but I think you need to do some self reflection here. What DID you spend all that money on? How DID you not notice how far you were going into debt? What circumstances led you to these private loans? I think you need to do some serious soul searching - if one of you is spending this money or both. I'm guessing there is a HUGE emotional problem there than needs to be fixed.

Sometimes it's more than being just about the numbers. Good luck.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Overflow on January 18, 2017, 09:34:59 AM
Hey dashh,

Just wanted to let you know I am positioned on the bleachers cheering you on.

You can do this.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Novik on January 18, 2017, 09:53:06 AM
dashh - congrats on recognizing the problem and wanting to do something about it. Because holy shit your consumer debt is absurd, with correspondingly mind-boggling minimum payments.

Three key steps in my mind, that relate to mindset/motivation rather than car/house/lifestyle changes:

1. Print a debt list publicly in the order you will crush them (I'd vote for a mix of snowball/avalanche where you snowball everything above 20% interest, and when those are gone snowball everything above 10% interest, then the rest)

2. Consider going to cash only spending. Use an envelope system, or a jar system. If actual cash isn't workable, change your work deposits so variable monthly spending goes one chequing account, and everything else (mortgage, debt, fixed payments - only true fixed payments where the amount never changes!) gets deposited elsewhere and paid from there. DO NOT CHANGE the amounts going to each account even if you decrease debt minimums or fixed payments. This forces you to snowball properly.  Anything you don't spend from the variable account (which I suspect will be minimal), needs to be added to debt payments or your emergency fund/savings for an inevitable larger expense like a car repair, NOT rolled over to future months and spent.

3. Track expenses every few days, every week at minimum. You need to stay on top of where your money is going on a constant basis. Having only what you control in one account might help drive home the limits you are really under and make you stick to them. You can't be borrowing from savings if you run out of grocery money because you went out to eat - so you need to know where you stand. Save treats and more discretionary spending for the end of the month.

You can do this, put it will take sacrifice, commitment, and strategy (0% credit cards, refinancing some loans, side hustles etc).
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: The Happy Philosopher on January 18, 2017, 09:58:32 AM
Wow.

Like others have suggested, meeting with a bankruptcy lawyer may be helpful. There is no downside. At a minimum you will learn something and have more options. The risk of default is built into these loans. There is no morality involved. There are laws and regulations that govern this area and they were created for people in your situation. Basically the courts will look at your debt, assets and income and decide how much you should pay. A good lawyer will be able to give you an accurate picture, and you can then decide if the negative consequences are worth it.

If you don't go down the bankruptcy route you need to do something about those high interest loans. I would start by calling and just asking for a lower rate. I'm sure there are a billion articles written no how to best do this and what tactics you should use. You could save thousands in interest payments that can be used to pay down the loans much faster.

Increasing you income and ruthlessly cutting expenses will help as well, as others have detailed above. Good luck. Let us now if you have success in getting those interest rates lowered.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SimpleCycle on January 18, 2017, 10:07:30 AM
If you are going to get serious about snowballing the debt, I agree that you should call every lender and try to get reduced interest rates.  I would also probably put your student loans into forbearance to knock out the high interest portion of the debt faster.

I trust you are committed to paying off this debt, and that you really want to change, but so far you have ignored everyone who has brought up really facing how you got here.  It's so important to getting out and staying out of debt.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on January 18, 2017, 11:13:01 AM
Hey dashh,

Just wanted to let you know I am positioned on the bleachers cheering you on.

You can do this.
I'm there too.  Maybe later we can get the wave going...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MountainFlower on January 18, 2017, 01:23:35 PM
Your credit union gave you a mortgage, so perhaps they will give you a consolidation loan for those insanely high loans that you have.  If you have a good history of paying your mortgage, they might consider it.  It is really worth a try.  Our credit union did this for us when we ended up with high credit card debts at the end of building our current home. 

I'm also cheering you on. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: cats on January 18, 2017, 01:47:32 PM
I would definitely encourage you to try to fix the commute situation.  It seems like MANY of your expenses may have something to do with the commute.  The obvious one is your gas/auto expenses.  But I am guessing you would also be much less prone to getting takeout if you weren't spending ~2 hours a day in your car (I'm assuming it's about that much if you are commuting 60 miles).  DW might also not feel the need for retail therapy so much if she were more rested and not spending 2 hours of her day commuting.  Perhaps you could cut back on some of the childcare expenses (you mentioned early care costs at the Y).  You have more time to do your own lawn care, housecleaning, and cooking.

If you add up all the expenses that are attributable to "not enough time", in addition to the gas and auto costs attributable to your commute, the annual cost may be similar to what an extra $25k of income looks like, post-taxes.  And there is no way that commute is not taking a toll on your physical and mental health.  I have a shorter commute than you do and it is still the least enjoyable and most stressful part of my day.  I am a huge proponent of minimizing commute time.

Is it feasible to live somewhere near your/DW's job? Or for one/both of you to get some options to work from home, even just 1-2 days/week?  I understand being attached to a particular area, but I question how much time you really have to benefit from the local community when you are spending so much time driving to another location.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Gondolin on January 18, 2017, 02:53:37 PM
Quote
a means test & what options might be available.

I can't think of a state where you would qualify for Chapter 7 with $10K monthly income. But, I'm not an expert.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GrandioseMustachio on January 18, 2017, 03:15:52 PM
Dear dashh,

On the bright side: congrats, your DW and yourself make a very decent living. You can do this!

A few points:
-1481$/month in interest on your consumer loans.
-Housing costs (Interest+tax+insurance+maintenance) are likely north of 1700$/month.
-Transportation costs (depreciation, insurance, gas, maintenance): more or less 10000$/year per vehicle. 1700$/month

4900$/month on housing, transportation and interest payments. That's half your income. The rest of your spending is only 2600$/month. Not quite mustachian, but not terrible, especially considering that this includes childcare. (remember, MMM spends roughly 2000$/month, with one less child and no childcare)

So, solutions:
-Interest (1481$) options:
   1) Call them up and ask for payment plans with no interest
   2) Consumer proposal
   You can probably save 1000$ per month.

-Housing (1700$). Seriously, you do not need 725 sqft per person. Options:
  1) Rent out as much space as you can (rooms to tenants, Airbnb, parking, storage). How much could you get?
  2) Sell the house. Downsize. How low can that number (interest+insurance+tax+maintenance or rent) get in your area?
  3) If you move, can you move close to work? Would that be an added cost? If your spouse or yourself can lose the car (biking badassity), you win.
  You can probably save between 400 and 700$ per month.

-Transportation (1700$/month). Options:
  1) Get two economical used cars. Right away. That would save you 500-700$ per month.
  2) (see housing above) Move close to work. Get rid of a car. Save an additional 600$.
  Potential savings: up to 1300$/month

In total, you could save 2400$/month or so. 28800$/year. Or, using the MMM multiplier, 415200$ over ten years.

But it gets even better. If you keep your income (and expenses) steady and simply pay debt and then invest, you'll have more or less 600k$ in your portfolio in ten years, with no debt! You can seriously do this.

PS: Flipping houses: can you offer your services and experience, but without taking extra financial risk? That would be ideal.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CindyBS on January 18, 2017, 03:59:45 PM
I would recommend something simple like this to help too.  I have this posted in a spot in my house I walk by 15 times a day at least.  It is a visual of bright colors of my debt.  I can't tune it out, and it is nice when people come over since they don't know it is financial.  In my case the white is what is left on my mortgage, but you can do anything.  The key is to have it in your view, in the front of your mind, every day.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: wenchsenior on January 18, 2017, 04:13:20 PM
I would recommend something simple like this to help too.  I have this posted in a spot in my house I walk by 15 times a day at least.  It is a visual of bright colors of my debt.  I can't tune it out, and it is nice when people come over since they don't know it is financial.  In my case the white is what is left on my mortgage, but you can do anything.  The key is to have it in your view, in the front of your mind, every day.

That is a fantastic idea!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MrSpendy on January 18, 2017, 05:07:15 PM
This may not be a popular idea, but if you are not going to sell the Frontier, I would suggest if at all possible, going to your credit union and getting another loan on it in order to destroy the super dee duper high interest credit card and avant debt.

My credit union gave me 90% LTV on a 4 year old car at 1.99% for a 60 month term. If yours gave you 60 months at 6%, that would be a $250 / month payment on $13K with which you could destroy your 4 highest interest loans completely and come out $190 / month ahead in cash flow (those CC's and avant have $450 / month min payments).

using the difference between a 30% loan and 6% amortizing 5 year loan as a rough calculation, this would save about $10K in interest costs over the next 5 years, and it would save you more because your reinvestment of the saved cash flow will be done at a higher rate (by putting it into other high cost debt).

There are obviously bigger issues here, but I'm not sure it makes sense to sit on an unlevered car when you have 35% interest rate debts. Credit unions are generally the best place to get car loans.

There are many downsides to this though  in that it encumbers an important asset (the one that gets you to work) and is not a long term solution; don't want you to have to deal with the repo man and blame it on me.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Shwaa on January 18, 2017, 05:16:40 PM
I would recommend something simple like this to help too.  I have this posted in a spot in my house I walk by 15 times a day at least.  It is a visual of bright colors of my debt.  I can't tune it out, and it is nice when people come over since they don't know it is financial.  In my case the white is what is left on my mortgage, but you can do anything.  The key is to have it in your view, in the front of your mind, every day.

That is pretty neat.  I like it.  You can use that method for lots of things, I may try it myself
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: snogirl on January 19, 2017, 09:56:48 PM
Honestly my head hurt reading this. Sorry. Four years ago I was 50k in debt and dug my way out by-
1. Stopped Spending!
2. Tracking every single cent I spent.
3. Cutting ALL fat. No cable, no internet, no haircuts, no eating out, no gym, no vacations, no gift giving, no Netflix nothing nada none
4. Sold all and everything possible and put money towards debt.
5. Kept a journal.
It worked. Started in April 2014 and was out of debt Jun 2016. Yours being 4x mine plus another income start trimming that fat.

Sent from my XT1635-01 using Tapatalk

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: shanghaiMMM on January 19, 2017, 11:46:43 PM
OK. This is it now Dashh. You've had 101 fantastic, helpful, practical ideas.

It's now up to you to go away and implement the ones you choose.

Keep us updated and best of luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: larmando on January 20, 2017, 11:20:47 AM
One thing that I wanted to point out is something that you said earlier OP, that you and your wife would be on board but then you would get take out or eat out and your wife would follow suit and not cut back. YOU are the leader! So lead. I suggest leading with expenses that are related to yourself and the household like organizing meal prepping for the week by looking at grocery store flyers for deals, doing the grocery shopping and cooking or packing freezer bags for crock pot meals and not eating out, etc. Show her that the money that you are saving the family is going to debt then it sounds like your wife will follow with fewer nail/hair appointments, shopping, etc.

This is a great suggestion and much appreciated.  I have to take the lead on this and I know she will respond and commit as well.  In fact, she will probably be as good if not better at it than I am once she sees I am finally serious about it.

And that is also why the Frontier has to go. It doesn't matter if it's paid off or not, economical or not, better or worse: you can't ask her to sell her stupid antimustachian car and get to keep yours. Besides that the house has to go to: you really need to move close to your work and in a smaller place. You really can do with a two bedroom. Maybe three. *at most*. Anything else is a fancy luxury and not for a time of debt. And the commute. Come on: you work in the same direction 60 miles away? Unless houses are double the price you are moving 50 miles in that direction *minimum*.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: larmando on January 20, 2017, 12:09:59 PM
Couple more comments:
- You don't really "live" in an area if you have to commute every day 60 miles round trip. Try to find a place where you can actually live. Having it be much smaller will help you make sure you don't fall for needing to "fill it" with new purchases. Freeing time will be much better for your children.
- If you lived in an HCOL area reducing house wouldn't be so easy (you'd have the same mortgage on a two-bed apt): count yourself lucky.
- Leveraging your "new to your" cars *might* make sense if and only if you do *serious* change.
- "shelter" is a need, "mcmansion" is not.

All in all if I were you I'd opt for renting, especially at the very reasonable prices you mentioned. It might also help it with your wife: next time you buy it can be a compromise between barebones and mcmansion, that you can really afford, without double closing costs, etc. Any equity *not in a house* will have much better return on your debt.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: The Happy Philosopher on January 25, 2017, 11:50:37 AM
Thanks for sharing such a personal story. Listening to people tell these stories helps us all learn and gain perspective. I think many of us can relate to the "I wish I had found MMM earlier" statement. Had I stumbled upon his blog when I  first started work (which was impossible because it didn't exist yet" I would have made a few different choices.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: researcher1 on January 25, 2017, 12:05:54 PM
dashh -

I commend you for your extremely high level of self awareness.  It is refreshing to hear someone be so frank about how they got themselves into such a desperate financial situation.

I would urge you to share your most recent post with your wife.  I think it would go a long way to explaining your thought process and accepting blame for the situation.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: meandmyfamily on January 25, 2017, 12:34:47 PM
I would have her read what you wrote here and listen to her thoughts!  You can do this!  You have really been thinking.  Better now than at 75!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Fiscal_Hawk on January 25, 2017, 12:43:34 PM

  Maybe I thought on some level that buying cars and houses would help deal with that discontentment, but obviously it hasn’t.  I really wish I would have found MMM much earlier as it would have changed my perspective on work/career tremendously. 



You aren't the only one is this boat. I know many people like us. They have nice cushy corporate jobs that pay well but they don't really like. Like you, I think they figure they are "stuck" in that situation and therefore they compensate by filling the void of dissatisfaction with large consumer goods - New cars, boats, toys, electronics, shopping sprees, lavish vacations etc ...

Don't beat yourself up. It's easy to do. The good news here is you found MMM and you now are aware of a way out. A better way to handle your financial situation. Turn the ship around. There is still plenty of time. Grab a bucket and start getting the water out! Good luck and you may want to consider doing a journal too. You have a great story and it could help you on your journey.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Fiscal_Hawk on January 25, 2017, 12:56:49 PM

  Maybe I thought on some level that buying cars and houses would help deal with that discontentment, but obviously it hasn’t.  I really wish I would have found MMM much earlier as it would have changed my perspective on work/career tremendously. 


You aren't the only one is this boat. I know many people like us. They have nice cushy corporate jobs that pay well but they don't really like. Like you, I think they figure they are "stuck" in that situation and therefore they compensate by filling the void of dissatisfaction with large consumer goods - New cars, boats, toys, electronics, shopping sprees, lavish vacations etc ...

Don't beat yourself up. It's easy to do. The good news here is you found MMM and you now are aware of a way out. A better way to handle your financial situation. Turn the ship around. There is still plenty of time. Grab a bucket and start getting the water out! Good luck and you may want to consider doing a journal too. You have a great story and it could help you on your journey.

Thanks for this.  Yes, "stuck" is exactly how I have felt for the longest time it seems.  And then you compensate with buying and just make yourself even more stuck/trapped with each purchase...

Yep. A good activity might be to organize a garage sale with your family. It will help you to try and figure out what stuff you don't need or want. It will also help you make a few bucks and put that towards your debt. It could be a great way to bring the family together and have it be a symbolic gesture of your new mustachian identity.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: homestead neohio on January 25, 2017, 01:36:57 PM
Following to witness the complete transformation to badass.  You can do this. 

Several different approaches have been recommended for getting DW on board.  You know her best, pick from the menu and try the most likely thing(s) to work.  If those don't work, move on to others.  Your coordinated efforts and mutual support will make this less painful and make your relationship stronger.  Shared adversity is a tie that binds.

I think you'll find that living in denial or claiming helplessness is what brings face punches from this crowd.  Commitment and informed action brings attaboys.  Post every single positive action you actually implement for encouragement.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: frugaliknowit on January 25, 2017, 01:39:59 PM
I would seriously consider filing bankruptcy.  While the Student and IRS loans are not dischargeable, likely the rest is.  Consider going into another field for about 10 years, until your bankruptcy disappears (you could also be "Mr. Mom", and pocket the daycare expenses...).  This could impact your wife as well if she changes jobs.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on January 25, 2017, 02:35:32 PM
The way I see it is that your high debt has actually slowly forced your real spending and lifestyle into a very reasonable number compared to your income. Your proposed budget had you spending $2,680 on expenses and $1,986 on your mortgage for a total of $4,666. You are actually spending less than half of your income to live if you had no debt beside a mortgage.

What that means is once you are out of debt you will be riding a speeding train driving down the golden rails straight into an early retirement. I know that someone in your situation can destroy this debt in around 5 years or even less if you are extreme about your situation... This is your chance to finally beat the debt for real. No relapse, no excuses keep your spending low and just get it done man.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: honeybbq on January 25, 2017, 02:43:00 PM
dashh -

I commend you for your extremely high level of self awareness.  It is refreshing to hear someone be so frank about how they got themselves into such a desperate financial situation.

I would urge you to share your most recent post with your wife.  I think it would go a long way to explaining your thought process and accepting blame for the situation.

+1. Coming clean that you have an addiction is step #1.

The rest is easy, comparatively.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: shanghaiMMM on January 25, 2017, 05:38:49 PM
+1 to the above. Fascinating background reading. Your post reads like someone who has swallowed the blue pill and awoken from the Matrix! Hopefully now you are aware of the issues, you can begin to be more mindful of your spending.

Another thing, now isn't the time to beat yourself up. Your past mistakes are done, over. There's nothing to be gained from dwelling on the negatives. Instead, focus your energy on tackling that debt!

Another +1 to the poster below - this kind of attitude will only gain support and encouragement. I'm following along because I want to see the transformation into MMM badass!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Rewdoalb on January 25, 2017, 08:52:26 PM
When trying to eliminate your commute, talk thru all potential options with your wife and decide together what's best for the family.

1 - move to where you currently work
2 - find jobs for one or both of you near where you currently live
3 - one or both of you get a job that allows telecommute

I don't want you to sacrifice proximity to neighbors, church and the school district if not necessary. But a change is due.

+1 to rent for a few years
+1 that your situation is not hopeless
+1 to debt snowball/avalanche idea posted earlier, with 20%+ debts and then 10%+ etc.
+1 sell both cars for solidarity
Edit: oh, and I would sell the cars on Craigslist. When my wife went from SUV to used hatchback, the dealer was quoting a net cost of $6000 ($4k trade in and $10k Fit). We sold SUV on Craigslist for $8k and bought a similar Fit for $6k and came out cash flow positive - even with a newer, more efficient, less mileage car!

Stay active on here for accountability

How much does she like her job? Set a goal for HER to retire. I bet it could be done within 5 years...Would that motivate her? Steps needed: steady job for you, pay off debt, save down payment for a more reasonable house. At that point she could FIRE and you eliminate most child care, some clothing/personal care, and commuting costs.

Best of luck! I'm in the cheering section too!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: FIreDrill on January 26, 2017, 01:13:02 AM
Posting to follow and support you!  You have gotten a lot of great advice so far.  You got this!

Sent from my SM-G935F using Tapatalk

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Sapphire on January 26, 2017, 01:42:32 AM
Wishing you all the best Dashh - you will get lots of support here. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on January 26, 2017, 01:48:52 AM
Look, you have a very good combined income so you can get out of it. I disagree with the advice re bankruptcy, that one should be the last resort, you are in a situation when you can pay off all this debt. Yes, it will take some time, but it is doable.

I hope you can sit down with your wife and decide on the next action. Facing the situation is the first step. It looks like you have a plan for cutting expenses and a budget.

Pick a debt and attack it next month.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on January 26, 2017, 07:09:42 AM

Pick a debt and attack it next month.

Wit electronic payment, you can attack it.today.  I find snowflake payments motivational.  Get a $5 mail in rebate?  Go put $5 on your target debt. Stayed $50 under on the grocery budget?  Put $50 on the debt. It's satisfying to see the balance drop frequently when you're getting started, and you won't have the cash sitting in your account as a temptation to spend.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: microwaves on January 26, 2017, 09:19:14 AM
From my perspective: You have an income problem at this point, not a spending problem. But before I talk about that, repeat this:

Quote
I will not donate other people's money

You're talking about tithing, saving for your kids' education and inheritance or whatever, and it all seems like a dream. What money are you saving? Your income isn't your money--it's the debtors' money. Getting a loan to give money to other people is not the same as giving your money to other people.

With that said, you need to learn more about protected assets in your state. Once you know that, you can either make a plan for bankruptcy or realize that it isn't an option. I would guess that bankruptcy is more palatable than the latter is, but unfortunately, the future is going to be bleak regardless.

This brings to mind the manager/CEO in Breaking Bad who owed so much money that a (relatively small) check wasn't actually going to fix his problems. You've reached the point where you don't have significant cuts you can make to your (estimated) budget: Selling your house doesn't help because you haven't built up equity in it yet; your car, while inefficient, is nearly paid off; you could sell your other car (your wife's car?) but ostensibly you'll still need a second car, so the realized gain isn't particularly high; your entertain and restaurant budgets are insignificant, as are the potential savings in your grocery bill.

That's your income problem. You will need thousands of dollars more per month than you're currently making, and that money can only be used to repay your loans. It cannot be used for any other purpose; otherwise, you'll have converted your income problem into a spending problem, which is surely how you got to this place to begin with. I don't have any ideas for ways to increase your income by that much per month or else I would already be doing that, and usually you have to spend money to make money. (I will not donate other people's money.)

Is your debt problem unique? Is it dire? Is it insurmountable? No. The good news: You can do this! The bad news as well as the reality: You're going to either declare bankruptcy or live in (spending) poverty for the next decade or so unless you stumble upon a buried treasure chest.

The reason I say that is because you simply don't have enough money to address your loans and you'll need to be committed to not spending anything extra for years and years. No vacations, no time off, no movies, etc. Assuming you want to pay your loans back, the order you should do that is:


Total      Monthly   
Amount   Rate   Payment   Comments
Loan #1   $4,676   35.90%   $177      7?
Loan #2   $4,278   27.98%   $194      6
CC #9   $1,000   26.24%   $41         3
CC #1   $2,588   25.99%   $28         4
CC #2   $2,279   24.99%   $72         5
CC #3   $7,997   24.49%   $198   
Loan #3   $882   20.00%   $284      1
CC #4   $8,447   15.49%   $231   
CC #5   $4,376   14.90%   $109   
Loan #4   $31,148   10.75%   $720   
Student loan #1   $49,036   6.88%   $368   
Auto loan #1   $25,868   4.09%   $515   Honda Pilot
Auto loan #2   $1,172   3.84%   $525   Nissan Frontier    2
Student loan #2   $4,066   3.63%   $86   
401K loan   $27,743   3.25%   $565   
Student loan #3   $2,508   2.75%   $108   
CC #6   $17,711   2.00%   $339   5-year pmt plan
CC #7   $2,032   0.00%   $78         7?
CC #8   $16,662   0.00%   $309   5-year pmt plan
IRS   $17,290      $240   Requesting 72 month pmt plan
Total:   $231,758      $5,187   



Ordinarily, you're supposed to pay debt based on the highest interest rates to lowest rates, but because you have an income problem instead of a spending problem, I'd aim at unlocking more money per month before reducing your $230k balance. This order will give you almost $1,400 more per month that you can use to repay your other loans with. Unfortunately, though, you won't have any money to spend while you're doing this, and I don't think your family will be thrilled at that prospect.

Do you think your wife could get a credit card if she applied? Or could you get another one? I'm curious to hear other people's thoughts on this, but why bother having the emergency fund at all here? If either of you could get another credit card during an emergency, what's the downside of using it instead of paying in cash? More debt? They're already down $230k. I'd definitely prioritize freeing up that $1,400/mo by immediately repaying those loans, but I'm positive lots of people would be uncomfortable spending the emergency fund on existing debt. It seems like you're already in an emergency, and my guess is that you've been utilizing this strategy already in order to collect that many credit cards.

I have no knowledge of IRS policies in this context, but I would get more information about that and then decide whether to focus on repaying that or the other loans with the $1,400 per month.

The bleak outlook here is that even with an extra $1,400/mo (from repaying those loans), that's only $16,800/yr, or $168,000/decade. Selling your house eliminates your mortgage payments, but then I'm guessing your rent payments won't be considerably smaller. I wish it were easier to make $230,000 quickly (and with 0% interest), but short of a windfall, you're looking at working a lot.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BigRed on January 26, 2017, 09:33:48 AM

Is your debt problem unique? Is it dire? Is it insurmountable? No. The good news: You can do this! The bad news as well as the reality: You're going to either declare bankruptcy or live in (spending) poverty for the next decade or so unless you stumble upon a buried treasure chest.

The reason I say that is because you simply don't have enough money to address your loans and you'll need to be committed to not spending anything extra for years and years. No vacations, no time off, no movies, etc. Assuming you want to pay your loans back, the order you should do that is:


Total      Monthly   
Amount   Rate   Payment   Comments
Loan #1   $4,676   35.90%   $177      7?
Loan #2   $4,278   27.98%   $194      6
CC #9   $1,000   26.24%   $41         3
CC #1   $2,588   25.99%   $28         4
CC #2   $2,279   24.99%   $72         5
CC #3   $7,997   24.49%   $198   
Loan #3   $882   20.00%   $284      1
CC #4   $8,447   15.49%   $231   
CC #5   $4,376   14.90%   $109   
Loan #4   $31,148   10.75%   $720   
Student loan #1   $49,036   6.88%   $368   
Auto loan #1   $25,868   4.09%   $515   Honda Pilot
Auto loan #2   $1,172   3.84%   $525   Nissan Frontier    2
Student loan #2   $4,066   3.63%   $86   
401K loan   $27,743   3.25%   $565   
Student loan #3   $2,508   2.75%   $108   
CC #6   $17,711   2.00%   $339   5-year pmt plan
CC #7   $2,032   0.00%   $78         7?
CC #8   $16,662   0.00%   $309   5-year pmt plan
IRS   $17,290      $240   Requesting 72 month pmt plan
Total:   $231,758      $5,187   



Ordinarily, you're supposed to pay debt based on the highest interest rates to lowest rates, but because you have an income problem instead of a spending problem, I'd aim at unlocking more money per month before reducing your $230k balance. This order will give you almost $1,400 more per month that you can use to repay your other loans with. Unfortunately, though, you won't have any money to spend while you're doing this, and I don't think your family will be thrilled at that prospect.

Do you think your wife could get a credit card if she applied? Or could you get another one? I'm curious to hear other people's thoughts on this, but why bother having the emergency fund at all here? If either of you could get another credit card during an emergency, what's the downside of using it instead of paying in cash? More debt? They're already down $230k. I'd definitely prioritize freeing up that $1,400/mo by immediately repaying those loans, but I'm positive lots of people would be uncomfortable spending the emergency fund on existing debt. It seems like you're already in an emergency, and my guess is that you've been utilizing this strategy already in order to collect that many credit cards.

I have no knowledge of IRS policies in this context, but I would get more information about that and then decide whether to focus on repaying that or the other loans with the $1,400 per month.

The bleak outlook here is that even with an extra $1,400/mo (from repaying those loans), that's only $16,800/yr, or $168,000/decade. Selling your house eliminates your mortgage payments, but then I'm guessing your rent payments won't be considerably smaller. I wish it were easier to make $230,000 quickly (and with 0% interest), but short of a windfall, you're looking at working a lot.

This summary is too bleak, and I feel the need to correct it because it is likely to be demotivating.  dashh is paying $7100 in debt payments every month (this includes the $1400, since that's just moving one payment towards other debt).  Continuing at that rate, $230,000 is only 33 months.  Obviously, there's interest, but all of the 5 figure debt is 10% or less, so that shouldn't add more than another 1/3rd to the total.  If you can stick to your new budget, this debt is done in about 4 years.  And then, you'll have practice living at a savings rate of nearly 70%!!!  You'll be an instant super-mustachian at that point, plus the daycare will be done by then.  The sky is the limit.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: rpr on January 26, 2017, 11:58:48 AM
One other option before declaring bankruptcy is to schedule a consultation with a local non-profit Consumer Credit Counseling Service (CCCS) office. Make sure that you can walk in and talk to a real live person. There are similar online agencies but I would avoid those as I'm a little skeptical.

The CCCS consultation is free. This organization usually has agreements with many lenders and can work to drastically reduce the interest rate. In effect this is a consolidation type of loan with a Debt Management Plan. You make one payment to the CCCS and then they pay the creditors. There is usually a small monthly fee. The CCCS works to make sure that the debt is usually paid off in 3-5 years. The CCCS agent should also let you know about all possible options including bankruptcy if applicable.

The big downside of this --
All credit cards will be immediately closed as you continue to make the payments. Your credit score will be affected, maybe not as much as declaring bankruptcy. Eventually, your score will start rising. This may take a few years (3-5).

The CCCS route is not for everyone and may not be for you. If you do go to a CCCS consultation, ask lot of questions. Take your partner along if possible. Ask for all the paperwork.

IMO, if you are able to pay off your creditors in  3-5 years even with the high interest rates, it is likely better to do it yourself without going to CCCS or without declaring bankruptcy. But it does not hurt to talk to both a CCCS agent and a bankruptcy attorney. 

The above information is based on my individual experience after talking to a local CCCS agent a long time ago. It is possible policies have changed. But it doesn't hurt to ask. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MandyM on January 26, 2017, 12:59:27 PM
You've reached the point where you don't have significant cuts you can make to your (estimated) budget: Selling your house doesn't help because you haven't built up equity in it yet; your car, while inefficient, is nearly paid off; you could sell your other car (your wife's car?) but ostensibly you'll still need a second car, so the realized gain isn't particularly high; your entertain and restaurant budgets are insignificant, as are the potential savings in your grocery bill.

I disagree with the above. Its focused solely on large gains, which a short term solution. Sure it would be great if there was equity to tap into to make a big dent in the loans. But there are are a ton of other reasons to consider selling the house and the cars and also to trim budget line items. For one, a smaller house typically translates to smaller utility bills, taxes and insurance. Moving closer to work reduces commuting costs and time.

For groceries and restaurant line items, I'd say the money savings is only half of the point. Bad habits are what dug this hole and good habits are what will get him - and keep him - out. Mindless spending needs to be reigned in on a day by day, dollar by dollar basis. And maybe at the end of it you spend about the same as you did last month, but there is value in the examination of each purchase beyond the money. "Do I really need to spend this money" should become the default thought that rolls through your head.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on January 26, 2017, 04:28:48 PM
It is not all doom and gloom. I disagree with the previous poster that getting rid of the house won't solve the problem. It will ease up the burden.op has so little equity in the house that he will be better off getting rid of it and renting, because keeping the mcmansion is costing him over 2k a month just in mortgage. Plus taxes, insurance, cleaners, security, lawncare, maintenance and repairs .....it is a giant money pit they can't afford. He will probably end up with 0 after selling it, but it will free up cash. If you can find a decent rental closer to work for under 2k a month, you are good. Ideally, you should pay way less than that. Have a look at the rentals closer to your wife's or your workplace to get a realistic picture. Also, have a chat with local realtor to see how much your house will sell for and how quickly.

Same with the cars. How much can you sell the pilot for? Can you get enough to buy an econobox with cash? 2 of them? (might be dreaming here). The wife will have go give up driving that giant carpayment. I guess they are underwater with that car.

Is there anything you can sell asap to pay off those high interest loans? Bikes, electronics, jewellery, collectibles?

If losing face and social status is a problem, just ignore the joneses. You can't afford this lifestyle. Maybe style yourself as a reborn environmentalist, telling them that you are embracing minimalism, simplifying your life becase this consumerism is stressing you out and is bad for the planet. Being a tree hugging greenie sounds better than broke.

If the wife is not on board yet (and why not), do your research first and show her the numbers. If you have a solid plan and a timeline, you should be able to persuade her to slash and burn. Especially if you tell her that you should be able to turn your lives around in about 3 years. It is not that long to go without manicures, and with your incomes you will be able to build wealth and enjoy a comfortable lifestyle once this debt is gone.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on January 26, 2017, 04:39:22 PM
Oops, sorry, i mixed up the cars. Definitely, sell them both, and whatever cash you are getting, this is your car budget. If you need to split it 80/20 to make the wife happy, so be it. But hopefully she will be reasonable. Btw i spent 7k on an old toyota 8 years ago, it is still going strong. 😀 have at least 3 years left in it.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MrsPete on January 26, 2017, 06:48:52 PM
We are drowning in debt and have to begin digging out.  Obviously our primary goal is to get stable and begin paying down the debt.  I have a lot of mixed feelings right now – extreme embarrassment and shame, fear and a little bit of empowerment. 
Look at it this way:  One of you is working JUST to pay off your consumer debt.  A full time job's take-home pay gone to cover yesterday's luxuries /mistakes.  That's a big face punch ... but worse, you're still spending at the rate that got you into this situation! 

Things to consider:

- Sell the house and move to something smaller.  You say it's slightly below median, but 2900 sf is a big house, and almost 2k is a huge mortgage.  You say it's a great neighborhood, good schools, etc. ... but you're driving an insane distance to work in order to live in this place.  Realistically, you're trading family life to live in this great spot.  How does that make sense? 

- Yes, you are over-carred.  Between payments, maintenance, insurance, it's a huge cost.  You say the two of you work in the same city (but different schedules).  Look into getting on the same schedule, even if it means a pay cut.  Ditching one car would save you BIG BUCKS.

- If your wife JUST gives up the hair/nails, that could turn into roughly 34,000 for the 2-year old's college account.  And that's just ONE change.  Okay, it wouldn't really be that much because she's not going to go from $1200/year to 0 ... but she could slash it significantly to cuts at a $10-15/walk-in place and spend maybe $100-150/year, and that would go a long, long way towards college.

- Don't spend a single minute thinking about your credit score; instead, think about financial stability.  They aren't the same thing.  Your credit score is all about being able to borrow -- you can never borrow your way out of this.

- Your commute time has to be cutting into your family time.  Look into jobs closer to home; at the moment you need to work as much as possible, but once this is behind you, your quality of life will increase too. 

- You do realize that 100% financing is a mistake, and the credit union who offered it to you is not your friend, right?  However, if they're willing to lend, lend, lend, why not get a personal loan from them and use it to pay off the credit cards?  The benefit is that the credit card interest is insane, and a personal loan would have to be a lower rate.  Of course, if you do this, you must cancel the credit cards.   

- Your wife wants to drive a van or SUV.  Here's the question:  Would she rather drive a van right now and be like everyone else, or would she prefer to one day be able to pay for the kids' college and retire? 

- This is not an income problem.  You're earning 2Xs as much as my husband and I, yet we are debt-free, own two properties, are in the two-comma club, and have paid for one kid's college /are halfway through the second kids' college.  Your income is PLENTY ... it's your spending /your lifestyle that's inflated; however, this is a choice.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Pizzabrewer on January 27, 2017, 02:20:09 PM


- Your commute time has to be cutting into your family time.  Look into jobs closer to home;   


This.

What is often lost in the here-and-now financial aspects of these discussions is the human/family cost.  You don't want to move closer to work because of school/friends/church/etc.  Yet you are both spending hours in the car each day while someone else raises your children.  Take it from someone who is chronologically much further along than you, time with your children is fleeting and priceless.

Move somewhere within 10-15 minutes (at most) of your jobs.  Time with your children is the worst thing to squander.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Mikila on January 29, 2017, 01:18:34 PM
Others have given great advice.  I just have thing to add:  If I owed that much money, I would not trust myself with credit cards. 
Do yourself a favor and cut them all up.  Use cash and debit/ prepaid cards only. 

You know what they say, the first step to getting out of  a hole is to stop digging.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on January 29, 2017, 08:29:38 PM
Thanks again to everyone for your comments and advice.  I am going to have a talk with my wife this weekend on all of this and we will see how it goes.

On a positive note, I did some market research on our home and it looks like we may have a little equity.  The market has been pretty hot in our area and I think we could get $330k - $335k for our home (we owe $302k).  Not a lot of equity, but may end up with something at closing given that I will use a flat fee MLS listing and basically sell it myself to save on commissions. 

I will post an update after our conversation.

Good luck with both.  And thanks for the earlier post.  FWIW, I think you just did what so many other people do -- you make a good salary, and so it seems like you "should" be able to have the nice house, and nice cars, and nice lifestyle, and all that.  And then you think about whether you can afford it based on whether someone will loan you money for it, and whether the payment fits into your monthly budget.  And before you know it -- and without even thinking about it, you're just doing life as you always thought it should be -- boom, you're stretched to the max.  So then you look for quick fix ideas to make more money and can't figure out why you're always so tight, and  doesn't work. And now you're in deeper and there doesn't seem to be a way our.

The reality is that no one can have everything.  Look at what you want:

Big house with yard in neighborhood with good schools
Two nice cars
Nice vacations
Nice lifestyle - eating out, manicures, etc.
Early retirement

Now pick one.  If you're really making a lot, maybe pick two.  That's reality.  For everyone, not just you.  But that's not what you see on TV -- that's not what you hear at the neighborhood barbecue.  No, what you see is Joe driving home a new truck; what you hear is Sue is talking about their big vacation.  You don't see that Joe saved for 10 years, and Sue doesn't brag about the 18% interest she is paying to cover that trip. Unless you happened to luck out and get parents who really taught you how to budget and all about compound interest, you have to figure it out on your own.  And that's hard, and most people learn it the hard way.

You really are not alone (my dumb-ass brother right out of college bought a brand-new SUV, promptly wrecked it, and replaced it with an even bigger truck).  But you can get there, and it does get better.  But you also have to fight your own way back, slowly and surely.  It's the need for immediate gratification that got you here, and the best way to unlearn that habit is (unfortunately) to feel the pain, month by month, as you whack at it bit by bit.  So please don't declare bankruptcy -- that is just another quick fix, and you'll likely find yourself right back here in 5 years.  Commit to doing the work -- no more buying anything on credit, no more "no down, easy monthly payments."  Eat what you kill, flip the usurious payday lenders the bird, prove to yourself you can do this.  I know you can.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ysette9 on January 30, 2017, 09:24:20 AM
Posting to follow. I am looking forward to hearing how the weekend conversation went. My fingers are crossed!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: pachnik on January 30, 2017, 09:29:19 AM
Posting to follow. I am looking forward to hearing how the weekend conversation went. My fingers are crossed!

+1.  I really hope it went okay.  :)   
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on January 30, 2017, 10:43:33 AM
Posting to follow. I am looking forward to hearing how the weekend conversation went. My fingers are crossed!

+1.  I really hope it went okay.  :)

Me too!  Even if your wife isn't on board, though, you can still go on ahead by replacing your car with something cheaper, and making whatever cuts you can by taking on more cooking, yard work, etc.  Once you've put some more skin in the game, you'll be much better placed to make requests.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on February 01, 2017, 08:54:41 AM
sounds like you are making great progress dashh.

Re; moving. It goes without saying that your wife needs to be completely on board, and it sounds like she's already very tired of the soul-crushing commute she's endured for the last 10 years.  Remember that these lifestyle changes are not solely about paying off your mountain of debt - they should also be about improving the quality of life.

As counter-intuative as it first seems to our consumer culture, choosing a smaller home closer to work will INCREASE your QOL.
We did this about 6 years ago to eliminate crazy commutes and get back all that lost time.  It was an abrupt transition but one of the best we ever did.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on February 01, 2017, 09:54:38 AM
Glad to hear you had that talk!  Yes, moving kids out of a school and a bigger house at this age is difficult but better now than later, when your son is a teen.  My kids still are friends with children from our old neighborhood, and actually it is a good thing to have more than one circle of friends.  When you are having a problem with one set of friends, it's comforting to have another set to turn to.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on February 01, 2017, 09:57:58 AM
dashh, it's natural to be concerned about how a move will affect your son.  But children do move all the time, for both positive and negative reasons, and for the most part, they cope.  With careful consideration to things like the time of year, how you'll help him maintain contact with friends, what facilities are in the new location (like parks, and libraries and public swimming pools), and knowing that your commute will be much shorter and you'll have the time to do more with him, then a move doesn't have to be a negative thing in his life.  And depending on how you include him in the process, you'll also be teaching him how to make good financial decisions, which will have a major impact on his future life.  The attitude to take is not "we have to do this to escape financial ruin" but "we're choosing to do this so we can have a better life now and in the future."

And hey, having parents who are less stressed because the burden of debt has been lifted from them?  That's priceless.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: The Happy Philosopher on February 01, 2017, 10:38:09 AM
Probably the best thing you can do for your kid is to get in a situation where you and your wife are happy. If you guys are stressed out about money all the time it will be perceived by kids.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GetSmart on February 01, 2017, 11:41:17 AM
Regardless of all other emotions and attachments - is the area where you work a decent place to live ?  Perhaps driving around to see what's available near the work place in terms of neighborhoods, amenities, etc. would generate a different mindset.  You could do it in a 'fun - adventure - just for kicks - theoretical' kind of way.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on February 01, 2017, 11:46:24 AM
Thanks for the comments. 

In terms of the house and moving - one big issue is that my wife is very emotionally attached to our home.  I can just see it as a house and a financial burden but that is harder for her to see given her attachment.  I understand where she is coming from and it will be something we have to work through together.
That's understandable.
Don't feel like it's imperative that you move today.  Let the idea settle for a few weeks - no doubt your wife will think about it during her 2 hour commutes.  Maybe in a month or two you both can look at some places closer to work (either rentals or homes), again just to see what's out there.  Only move when both of you firmly agree that it is a good idea (and even then there will be some attachment). It might be six months, or even a year from now. 

If you haven't this article yet on the True Cost of Commuting (http://lifehacker.com/5855550/the-true-cost-of-commuting-you-could-buy-a-house-priced-15900-more-for-each-mile-you-move-closer-to-work), check it out.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on February 01, 2017, 12:06:07 PM
Regardless of all other emotions and attachments - is the area where you work a decent place to live ?  Perhaps driving around to see what's available near the work place in terms of neighborhoods, amenities, etc. would generate a different mindset.  You could do it in a 'fun - adventure - just for kicks - theoretical' kind of way.

Yes, this.  Also, test the commute from your hypothetical new home.  When we moved from 30 minutes to 8 minutes away from work, it was amazing.  During escrow, I would just pop by the new house and think:  Wow, this is my new commute!  Then I'd imagine all the time we both just bought back.  BTW, even though I never had as long of a commute as you, I found way more time to lead a healthy lifestyle and lost a ton of weight after moving closer to work.  You'll have way more time to provide support to your son as well, which should help him make the transition.

Well done on having the talk.  Keep us posted as you move forward!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: galliver on February 01, 2017, 01:12:23 PM
If I recall correctly, your older kid was in elementary school? More than likely, a move will not hurt him/her, if they're a fairly average kid, socially. My parents moved...4 different times while one or more of us kids was in school (but 2 of us only moved twice, youngest sister 3x during school years). I think my youngest sister and I would agree moving between 2nd and 3rd grade was no problem; they mix up classes each year anyway so all the kids were making new friends. My other sister moved when she was 10 and had a bit more trouble with it. She's very introverted and had a best friend she was really close to that we moved away from. Even so, by high school and college she was fine. It's harder to move in high school as curricula (esp between states!) and grading systems don't always line up. And that's where your grades actually matter! So, frame it as an adventure, don't move till summer, and take care of it now when they're adaptable and family-centric rather than when the kid is older and has more connections and more at stake. :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on February 01, 2017, 03:59:33 PM
Thanks for the comments. 

In terms of the house and moving - one big issue is that my wife is very emotionally attached to our home.  I can just see it as a house and a financial burden but that is harder for her to see given her attachment.  I understand where she is coming from and it will be something we have to work through together.

I totally get this -- I am like your wife, you are dragging me out of my house feet first.  One question:  does she know how bad your situation is?  I'm not sure how much she has known/participated along the way vs. coming home one day to "hey honey, we're way over our heads and I already figured out that the solution is to move." 

I ask because usually the best way to convince someone is to let them choose it themselves.  If you haven't already, sit down with the debts, what you have been spending to maintain your current nice lifestyle, and a couple of proposed options.  You can walk her through how long it would take to pay off the debts on a "normal" repayment plan, so she can see that basically means working full-time forever.  Then you can walk her through your "sell and move closer" option, to show how much more quickly that gets you there, and how that will enable you to focus on other things you value (RE, maybe going part-time at some point, etc. -- pick some things that she really cares about that selling the house will allow you to work toward).  And then you can work with her to develop another option of the "if we stay put" variety -- that's always an option, but it means really significant tradeoffs, like selling both cars and becoming a one-car family in an econobox, cutting total food budget to maybe $400/mo. (or less), less desirable childcare, zero extras for X years, etc.  That helps demonstrate the real "cost" of keeping the house, and so gives her the ability to decide on her own that, as much as she loves this house, it is really not worth that degree of tradeoffs.  And that kind of buy-in is the only way any of this actually works long-term anyway.

But I am very impressed with both of you so far -- you for facing up to this and diving in so whole-heartedly, and your DW for being so receptive to such a major upheaval in your lives for the greater good.  Please keep us posted!   
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on February 01, 2017, 08:51:02 PM
Congratulations on having the talk.

Hope the wife is ready to move on quickly, as currently you are just threading water. Run the numbers again. Together. Show her that you can fix this in about 3 years or less. It is not that long. And then you will be free.

Find a few nice rentals closer to work. Have a look. Check out the local schools.

With that commute, your house is just a very expensive bedroom and storage space, you have only a few hours a day to be emptionally attached to. You could spend those 2 hours you currently spend commuting with your children instead. How does that sound?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on February 02, 2017, 12:47:14 AM
You are doing well. Glad you came up with some new areas you can optimise. What are you planning to do with these savings?

Wife will come around. She might take a while, but she has to. If you keep focusing on sorting this out, you will be able to motivate her.

Let us know how you go. You might want to start a journal to document your journey.. It is good to see people taking advice and making progress.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on February 02, 2017, 12:40:17 PM
Keep it up, Dashh!

I'm posting to follow your journey.

I'd like to second the idea of a debt drawing.  I am doing one as well.  It's meditative and motivating!

What city/state do you live in, or are planning to move to?  Sorry if I missed this somewhere before.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on February 08, 2017, 09:51:04 PM
Great to look back at your first post and see where you've followed up on some of the things you identified right at the beginning.  It's only been a couple of weeks, and you're making your way right through that list! 

Good for you, and keep up the good work.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on February 09, 2017, 06:17:02 AM
Baby steps...I believe I am going to start a journal to share more of our journey.  I think it would help me to stay on track and we can use all the support we can get!

I'll keep an eye out for your journal!  Keep trimming that fat!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: jessicat on February 09, 2017, 06:36:48 AM
I am excited for you and your wife.  You guys can do this and you are changing the way you view money.  You are choosing happiness.  You will love the way it feels when all of your debt is gone.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ysette9 on February 09, 2017, 06:43:55 AM
You're making good steps. Congrats! Keep it up and keep posting so we can cheer you on.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: TheStrenuousLife on February 09, 2017, 08:52:34 AM
Posting to follow.  I'm inspired by your determination to not give up and tackle a very scary pile of debt.  It will be a long haul but in accordance with the principles of Mustachianism, simplifying your lifestyle and living more frugally should actually make you happier, healthier, and wealthier.  Good luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: kkenn on February 09, 2017, 10:23:28 AM
Good luck Dashh! Rooting for you from California! You can do this :) 

Lead by Example!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Step37 on February 09, 2017, 08:09:22 PM
Posting to follow.  I'm inspired by your determination to not give up and tackle a very scary pile of debt.  It will be a long haul but in accordance with the principles of Mustachianism, simplifying your lifestyle and living more frugally should actually make you happier, healthier, and wealthier.  Good luck!

+1 - you seem to have the right attitude about this! :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on February 16, 2017, 12:58:48 PM
Quote
If anyone here has been able to change your habits regarding soda/junk food/fast food I would really appreciate any tips.

Awesome update! 
Regarding avoiding junk food/fast food, I first had to realize that I wound up eating junk food because I was hungry, and it was fast, and it was simple.
My solution early on was better planning and having a small arsenal of ready-to-heat meals.  It's often about the same amount of work to prepare 4 lasagnas and freeze 3 then it is just to make one.  There's a whole list of things that can be prepped ahead and then frozen (you've already found frozen pizzas).  Most of the time our ready-to-cook meals take less time plate-to-table than if we ordered takeout.  We'll spend 2 or 3 sundays per month bulk-prepping meals.

We also always make enough for to take for lunch, eliminating the need/desire to buy lunches at work.

Regarding soda - just don't buy it.  I drink seltzer water + lime/lemon most of the time (yes, I have a sodastream), or plain old water.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: homestead neohio on February 16, 2017, 01:18:37 PM
If anyone here has been able to change your habits regarding soda/junk food/fast food I would really appreciate any tips.
...
Anyway I know I am not helping things with my wife if I flip flop on this and she is just going to be confused and frustrated (and much less likely to want to sell and move). 

Great update, dashh. 

For my family it was easy to change diets after realizing how terrible the industrial food complex is.  This happened slowly over time through reading (try "Salt, Sugar, Fat") and watching entertaining and disturbing documentaries ("Fast Food Nation").  There are lots of others.

If you can do your flip-flopping on this thread, we can help you think through this stuff without exposing the DW to the confusion/frustration.  Or let her see that this is hard for you, too, but so important you still go through with it.  You certainly haven't squandered any opportunities, you are just doubting some major decisions before pulling the trigger.  Doubt away, re-think, but ultimately make the best decisions for future you, instead of falling for smoke and mirrors and re-re-re-mortgaging your future.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on February 16, 2017, 01:22:15 PM
http://forum.mrmoneymustache.com/ask-a-mustachian/help-me-regain-my-health/msg1405572/#msg1405572

This thread has lots of good info on improving dietary habits.

Great work on cutting your budget down.  You're going  to see results so quickly as those crazier interest rate debts get knocked out, and you gain momentum!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: pachnik on February 16, 2017, 01:23:06 PM
Re:  soda.

In my 20's I used to drink a litre of diet Pepsi per day.  I stopped by switching to club soda for a little while, then to mineral water and then to plain tap water.   I never went back to drinking pop or soda.  It is really bad for you - stains your teeth, can create cavities, and IIRC, there is a chemical in it that leaches calcium from your bones.  So just bad stuff all around.

Good luck!!!!   

Also, planning really helps me stay away from junk food.  One thing I always do is keep some almonds/trail mix in a container in my desk at work.  If my lunch isn't enough or i get hungry, then I just eat that rather than buy a snack from a coffee shop or corner store.   
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: FIreDrill on February 16, 2017, 01:34:56 PM
Congrats on making progress with the budget!  I still say sell the truck and use the money to buy a cheaper car or two that will replace one or both of your vehicles.  If I were you I would just take it one step at a time and focus on replacing your truck for now and freeing up some cash.  You can figure out the wife's vehicle when the time comes.  Progress is made one small step at a time.  You got this!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: marty998 on February 16, 2017, 01:45:21 PM
Congrats for starting to turn things around dashh. Keep it up and stay motivated and you'll be out of this hole before you know it!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Step37 on February 16, 2017, 02:15:48 PM
Sounds like good progress. When you sell the truck and buy a more mustache-friendly vehicle for yourself, could you pay the remaining extra funds against your wife's Pilot? Then the equity would be there for when she's ready to sell (or at least it would be paid off more quickly). Having the cash tied up in the Pilot would give you less flexibility to jump on good deal on a different vehicle if it came available, but if you think she's going to take a long time to make this move, it could be a reasonable compromise and keep the funds allocated where you want them. Or maybe the monthly payment could be lowered by paying a lump sum?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: galliver on February 16, 2017, 02:17:28 PM
If anyone here has been able to change your habits regarding soda/junk food/fast food I would really appreciate any tips.

The simplest (and I'm not saying easiest) way is to not buy it. Not bring it in your home in the first place. Growing up, with rare exceptions, we'd only have chips and soda at parties (sometimes picnics/barbeques). They weren't an everyday snack. Having that attitude made it easier to instill a similar rule for myself as an adult (after developing some less-than-stellar habits in college, heh). Point is, 100% prohibition probably won't work, but treating these things as truly rare indulgences rather than something you pick up weekly will drastically decrease consumption. Up to you what your rules are. I do like having some food groups reserved for parties/gatherings.

For sodas, I personally am not a huge fan of fizzy and/or extremely artificial flavors, but I do like a flavored/sweetened beverage now and then...however, I limit myself to one on normal days (i.e. non-celebrations/gatherings) whether it's a glass of juice or ginger beer, beer or cider, glass of wine, etc and I don't always have that. Bf and I might split a bottle of wine on weekend... Other things I like to do are homemade iced tea or lemonade (I add far less sugar than is in the packaged stuff), flavored water (add cucumber, herbs like basil or mint, citrus, berries, etc and just sit it in the fridge a few hours up to a few days...feels very fancy IMO), or flavored fizzy water like LaCroix. The last is not cheaper than soda, but if you like it less, even as it fulfills your desire for bubbles you'll likely consume less and less of it. Finally, I do drink black tea in basically unlimited quantities whenever I want, as well as water of course.

Re: your 2) and 3)....it's ultimately up to you what your priorities are. People here will likely try to convince you to sell your house/car/etc but the real question is: what do you want more: to be out of debt sooner or to have these things? And if your answer is "the latter and I'm willing to cut the rest of the budget and scrimp for 5 years"...there's not a lot of point in convincing you otherwise, I think.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: The Happy Philosopher on February 16, 2017, 02:28:11 PM
Hello all,

I wanted to post an update regarding our progress and also to just share some of things I have been going through:

1)    Monthly Budget:  The monthly budget cuts have gone really well with us shaving around $1K/month.  We are tracking all of our expenditures with YNAB and things are going pretty good.  I am really happy that we were able to cancel all of the Y early/after care which is saving us $277/mo!  The bus is working out great for our son.  We still need to tighten up our grocery/eating out as I had not factored in my wife’s café at work.  She usually eats lunch there (at a discount) and sometimes brings home meals for dinner.  We also still have money budgeted ($100) for eating out, but need to bring it down even more.  That is one of my issues that I have to lead on.  I did take the tip that someone posted about buying cheaper frozen pizzas to have on hand.  Sometimes we get home and are spend and just order pizza but instead I told my wife we could just cook the frozen pizzas for much less cost.  Another area I can help with is with my soda/junk food problem.  Not only does it cost us money at the grocery store, but it is terrible for my health.  Not to mention my oldest son has already been influenced by my setting a very bad example about eating and drinking junk.  I feel really bad about it and must make some changes.  If anyone here has been able to change your habits regarding soda/junk food/fast food I would really appreciate any tips.

2)   Autos:   So I was supposed to get my truck ready to sell last weekend.  My wife was out of town with the kids which gave me a chance to clean it up and take pictures to post on CL.  I found myself avoiding it and ended up cleaning the entire garage and house instead.  My internal dialogue went something like this, “I worked hard for many years to get this truck paid off and I deserve to keep it,” and “this truck has been very helpful in my house flipping business and I am going to need it in the future,” and “what if I buy a lemon and have to spend more money to fix it?”  I think there is a bit of truth in all of these but the bottom line is I have equity in that truck that can help me get out of debt!  My entitled mindset really kicked in and I started to rationalize keeping it.  I told my wife I changed my mind and she came up with her own rationalizations to not sell it as well.  But then she said something that made me think – she said now I know how she was emotionally tied to our house since I was emotionally tied to my truck.  That made me think and it just felt wrong to not sell it.  What message is that sending to her?  I am supposed to be leading this and committing to it.  The past few days I have thought more about it and I know I need to sell it.  I think part of me is also hung up on the fact that my wife does not want to sell her Pilot.  My plan was to use $5k of the $13k or so I can get for my truck to buy me a car and then use the rest to buy her something else.   That way we can sell the Pilot and get rid of $25k of debt and a $515/mo payment.  So I don’t want to sell my truck and use the money to pay off other debt because then I will not have the money to buy her another car if we can ever agree on selling it.  I am open to suggestions here.  I know I just need to start with selling the truck (which I still plan to do) but should I pay off some debt or hold the money for another car?

3)   House:  Where do I begin – we had agreed to pretty much put this on hold and look at options depending on where I land on the job front.  However, this weekend while deciding I didn’t want to sell the truck I also did a complete 180 on the house too.  It is like my old mindset just kicked in and said “screw it we are staying and I am not selling my truck…we deserve all of this and will just make the budget changes and take 5 years to pay this all off.”  A big part of that mindset is my job/career.  I have always resisted accounting/finance for some reason and when I got into real estate flipping thought that was what I wanted to do.  I really enjoy it and it is great but I just cannot make that much money at it right now.  So a part of me is saying to suck it up, get a job in finance that I can tolerate and will help us get out of debt faster and move forward.  The other part is saying keep the house and try to get a job closer to home (which will not pay as much IF I can find one) and still pursue this real estate dream.  The problem is the real estate stuff is part of the reason we are in this mess.  I need to keep it as a side hustle and just get a job that can get us out of this hole.  And that job will most likely be closer to my wife’s work which puts us back where we started with the commutes.  So it would make sense for the house to go too and we move closer.  Anyway I know I am not helping things with my wife if I flip flop on this and she is just going to be confused and frustrated (and much less likely to want to sell and move). 

So we have made progress on the budget cuts but not so much on the things that will really speed up the process for us financially and in terms of quality of life.  I think once I looked at the snowball calculator and saw that we could keep the house and cars and still be debt free in around 5 years it really messed with my head and mindset.  I am just struggling with this back and forth in my head.   

This ended up being longer than I had planned so thanks for reading and for any advice as always!
Tons of good stuff here. The finance stuff is easy and simple, the psychology stuff is hard and complex. You just gotta keep working through this stuff until you settle on a plan that will make you happy. I  would suggest continuing to push into the uncomfortable and see where it takes you. For me that is how I grew and changes my mindset. Keep writing, I get the feeling putting your thoughts out here is helpful to you.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on February 16, 2017, 03:57:19 PM
Quote
I know I just need to start with selling the truck (which I still plan to do) but should I pay off some debt or hold the money for another car?

I'd use that money to pay off your highest interest debt.  It may take your wife some time to get to the point where she wants to sell off something, and during that time your debt will still be accumulating at high rates.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on February 16, 2017, 05:53:03 PM
Hey, just wanted to say that your self-awareness when it comes to your own thought process, and how your feelings about all these changes affect your wife's attitude, and all the stuff you talked about in your post - this is awesome!  Not awesome that you're wrestling with internal resistance, but awesome how aware of it you are.  That kind of insight can be slow and hard to come by, and some people never achieve it - they see their problems as created by society, or themselves as unluckier than others, etc.

You've got lots of decisions to make, but I'm pretty confident that you're going to be able to do what you need to do - which may include 100% of what's been suggested by people here, or only 75%, or some other number.  It's all about how fast or slow you want to go, what's right for you and for your family.

Please, keep posting.  After a seeing a couple of heartbreakingly desperate case study threads implode recently, without the people seeming to really be able to grasp the lifeline that's being offered, it's great to hear/read some positive news.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: wenchsenior on February 16, 2017, 06:41:17 PM
Most people on here will give you great suggestions, and I don't have time to do that, but it is SO EXCITING to see you really starting this process and actively engaging with the psychology of change. It's particularly gratifying given the lack of apparent progress in some of the other threads with terrible debt situations.

Remember, this is a  process of recognizing where your psychological 'traps' and bad habits are, and then focusing on them and figuring out how to defuse the traps and build better habits. You have to go through the process to make it stick, and it isn't always fun. We've been doing it for about 8 years really aggressively, and we still occasionally slip a bit. Just keep swimming/get back on the horse/pick your metaphor. 

Same with your diet. Pick one thing first, and concentrate on that. So maybe figure out how to eat out less by focusing on that for a month, then move onto the soda/junk food thing. Or the other way round, whatever. 

After you've got a few financial and health habits under control, you can stop thinking about those and concentrate on the next.  The trick is to make the new habits stick once you turn your attention to items further down on the list. Just plod along, stay focused, and pick the low hanging fruit first to make habit building easier.

Good luck! I'm excited for you!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on February 16, 2017, 07:49:00 PM
Hey, just wanted to say that your self-awareness when it comes to your own thought process, and how your feelings about all these changes affect your wife's attitude, and all the stuff you talked about in your post - this is awesome!  Not awesome that you're wrestling with internal resistance, but awesome how aware of it you are.  That kind of insight can be slow and hard to come by, and some people never achieve it - they see their problems as created by society, or themselves as unluckier than others, etc.

You've got lots of decisions to make, but I'm pretty confident that you're going to be able to do what you need to do - which may include 100% of what's been suggested by people here, or only 75%, or some other number.  It's all about how fast or slow you want to go, what's right for you and for your family.

Please, keep posting.  After a seeing a couple of heartbreakingly desperate case study threads implode recently, without the people seeming to really be able to grasp the lifeline that's being offered, it's great to hear/read some positive news.

I second everything here.  Your self-awareness and willingness to challenge your own way of thinking is the best evidence that you will find your way through this.  Just remember:  it is your role to lead your family.  That means you make the uncomfortable, hard steps first.  It is totally natural to think, "well, if she doesn't want to, why should I do without?"  But your changes may inspire your wife to follow suit when she sees that you are still happy even with a "lesser" vehicle.  And even if it doesn't -- dude, have you looked at your interest rates lately?  :-). How good will it feel to send that extra cash off to one of those ridiculous rate loans/cards and not pay usury every month??  Do whatever you need to do to keep your eyes on the prize.  Talk/vent/kvetch/worry here, so you can go off and do great things at home.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: homestead neohio on February 17, 2017, 07:30:58 AM
+1 to those who have suggested equity from your vehicle sale goes to killing high interest debt, not tied up as equity in something else you may decide to sell.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: jessicat on February 17, 2017, 07:11:16 PM
I find it interesting that our mind likes to tell us we deserve things just because we are breathing.  We don't deserve things we can't pay for in cash.  And yet our mind will try to block our progress because to our minds progress is scary because it is the unknown.  I feel like I have to fight my brain to do the stuff that is good for me and will make me happy.  So glad you are fighting your brain freaking out because you are changing.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Neustache on February 18, 2017, 09:02:31 PM
Re:  soda.

In my 20's I used to drink a litre of diet Pepsi per day.  I stopped by switching to club soda for a little while, then to mineral water and then to plain tap water.   I never went back to drinking pop or soda.  It is really bad for you - stains your teeth, can create cavities, and IIRC, there is a chemical in it that leaches calcium from your bones.  So just bad stuff all around.

Good luck!!!!   

Also, planning really helps me stay away from junk food.  One thing I always do is keep some almonds/trail mix in a container in my desk at work.  If my lunch isn't enough or i get hungry, then I just eat that rather than buy a snack from a coffee shop or corner store.


Yes!  Food chain yourself to plain water by going a soda<carbonated water (no sugar)<water route.  I get carbonated water (again, no sugar or fake sugar) and it's amazing how a little carbonation and flavoring is still such a treat to me. 

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: J_Stache on February 19, 2017, 07:39:54 PM
I know I just need to start with selling the truck (which I still plan to do) but should I pay off some debt or hold the money for another car?
Both options are good.  Let your wife know that the extra money from selling your truck can be used for a replacement vehicle for her or will be put towards debt repayment.  Convince her to look at some replacement vehicles, but let her know that the decision to buy vs. stick with what she has is completely up to her.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: pachnik on February 20, 2017, 10:09:10 AM
dashh, I just wanted to say that your frankness is really inspiring. And congratulation to you both on the excellent work in reducing expenses already!

I agree with others here in that you have to set the example. In my case, I have found that DW sometimes doesn't immediately take to an idea, but after meditating on it and seeing initial results, she eagerly comes onboard. That's how we avoided buying a house or condo a few years ago in the biggest boom/bust cycle ever in Brazil, are still renting (much cheaper than buying here) are now much better prepared for when/if the time to buy comes.

You have reached this site and its ideas on your own, and reached your own conclusions (which may undergo revisions from time to time) about what to do. So you didn't need any convincing; you convinced yourself. But your wife is a different story.

Don't nag her about selling her vehicle. Sell yours first and pay off some debt, thereby reducing debt, monthly payments and interest, and gas costs. That way she'll see that improving the family's financial situation really matters to you, even if it means getting rid of things you are attached to.

This.  You set the example.  When I found this website,  I started to do some of things I read about people doing here:  stopped buying coffee when out (made it at home); bought lunch out much less often etc.   I never really bugged my husband about this kind of stuff because in many ways he was much less wasteful than I was. 

Fast forward a few years, my husband is reading books about investment and personal finance from the library.  I did not imagine this happening ever.  So you just get going on what you can control and see what comes of it. 

Good luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: baburu on February 20, 2017, 11:56:44 AM
dashh, since you're in Raleigh NC, check out this guy who lives there and retired at 33: http://rootofgood.com .
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BlueHouse on February 23, 2017, 11:27:46 AM
If anyone here has been able to change your habits regarding soda/junk food/fast food I would really appreciate any tips.
...

I have the same problems and I go in spurts.  But I find that it takes me about 3 days to change a diet habit.  I will find myself doing the fast food thing without even thinking about it, so I have to have no cash or credit cards* with me for about 3 days before the habit of driving to the fast food drive-through is gone. 

Soda -- it's really hard for me to make it through those first three days without soda, but after that, it's much easier.  I drink a LOT of tea (with caffeine and without) when I'm off soda.  I'm currently on no-soda, and I'm realizing I probably can't ever have another early-morning Diet Coke without falling right back into the habit. I love the feeling of a cold aluminum can against my teeth when the fizzy cherry liquid hits my tongue.  Guess what else I've noticed?  I have NO DESIRE for anything salty (chips, crackers) unless I'm drinking soda.  Check and see if your soda drinking causes other overeating/poor food choices and maybe that will help too.  It goes the other way too.  If I pick up a bag of chips, I can't enjoy those chips without a sweet drink...so just be aware.

Instead of ordering pizza, here's a VERY SIMPLE, and fun crock pot recipe for baked ziti.  no boiling water, no giant clean up.
http://buildyourbite.com/easy-crockpot-baked-ziti/ (http://buildyourbite.com/easy-crockpot-baked-ziti/)
 And after you teach them once, your kids can make this for the family once per week.    Maybe you want to help them start a notebook of dishes that they can make.  I'm still trying to get meal planning figured out, so maybe if you can get your kids to show an interest, it will be more fun for everyone.   Another pointer for getting the kids to like home cooking:  When grating cheese or chopping vegetables, get the kids to guess when you have 1/2 cup, or whatever amount you need, and then put it in the measuring cup, it will be fun and will help get them better at estimating volumes and weights.  I wish I had learned these tips years ago!


*I've found that I use plastic mindlessly and that seems to be my weakness.  So on a somewhat regular basis, I'll purposely avoid using credit cards.  But I still want the safety/security of having one with me in case of emergency.  So I keep one of my seldom-used cards encased in plastic laminated film.  No need to have it with me most of the time and I keep it in a desk drawer.  But on these "Plastic Diet" days, I switch out my wallet for this card.  Now I'm safe, but I can't spend money unless I pull that plastic off.  I've never had to do it.   

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: wintertell on February 24, 2017, 05:43:18 PM
I just want to chime in and say that I was very similar to you just 3 years ago! When I graduated from graduated school, we were 183K in debt, with over 133K in student loans, plus two car loans, and a mortgage for our mobile home. This was in our second month of marriage. I was so overwhelmed. It caused a lot of stress on my relationship, even the month after the honeymoon!

However, I found the journal section here to be a safe place to write and go back and forth, and then I tried to be all action and helpful around my husband.  Now, we are down to about 20K in debt - 6k of the original debt, plus a new-to-us car that we financed in Oct. 2016. Not perfect, but progress. (As an FYI, I live in NC too).

You can do this!!! Some folks in the journal section have decided to live life a bit more, and so are paying stuff off slowly. Some people put the petal to the metal and crush it. I would argue for the petal to the metal approach and to try a bunch of stuff and see what sticks and works for your family. Any area of personal growth requires being uncomfortable and trying new things. Reforming financial habits - at least at first - requires that uncomfortable tenacity. Take advantage of your enthusiasm now to make changes so you can see and feel progress. A good start makes the journey easier.

On trust:
But at the same time, I think your awareness that you must lead by example is right on / is key. You can lead by example, try new things (with DW's acceptance) and make a lot of progress. That will build trust -- in yourself that you can do this, and with each other, to keep each other mutually accountable. I think you need to build that financial trust between you and DW by leading with your behavior, especially given the spending history/background you gave us. So, I would start with the truck.

This series on The Simple Dollar is one of my absolute favorites in terms of reforming behavior. What Trent advocates is golden. Devote an hour a day or a week to better yourself and your family financial, by working on the emotional side of spending, or working on cutting a bill.  http://www.thesimpledollar.com/31-days-to-financial-independence-intro-and-day-1-the-shallows-and-the-deep/

The connections between health and finances:
One last thought: Now that our financial act is in order, I am turning to health. I did not have the mental capabitliy to deeply focus on two big life-changing projects at once. But I find that the same behaviors that led to pay off my debt apply in a similar-but-not-the-same way to weight loss.

The biggest thing that crosses over is:
1) This is a journey that requirements a very big "why", to keep going in the long term. Why pay off the debt? Do you want to retire? Do you want to help your kids through college? Do you want to be a good role model for your wife and your kids? Do you want them to have healthy financial habits so they can live a rich life. What's your why??

2) The journey requirements a relentless commitment to tweaking and self-improvement. What's one behavior you can change today? What's one phone call you make to better your financial situation today?

This also means a constant, low-level drumbeat of change as you change your habits.  Change can be uncomfortable. It can also be exhilarating when you see your results. Luckily for you, you will be able to see the change through knocking your debts out one by one.

On the right method for debt payoff for you:
This is why I would consider the Dave Ramsey-like approach, so that you can have the reward of knocking debts off and seeing results. A disclaimer: I did not follow the Dave Ramsey approach. I just paid off whichever debt bothered me the most. This alternated between lowest balance and highest interest rate, depending on what I felt was achievable.

Since paying off a large sum of debt requires change over a long period of time, it might be worth it to figure out consider what method isn't the "best", but rather what motivates you (and DW) more? Knocking down debts fast (AKA snowball approach, lowest balance) or paying the least amount of money (highest interest rate) or the "emotional" approach (pay whatever sucker you hate the most).

Good luck! I will be cheering for you!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: COEE on February 25, 2017, 12:38:41 PM
Wow - what a great story.  I'm rooting for you as well.

I know selling your truck and home are hard things to do.  For a long time I had had difficulty with selling our home... it was our 'home'.  We had bought it as a foreclosure and updated most of it to where we wanted it.  It was a nice home in a gated community with many geological features surrounding and butting up to a state park - stunning is quite the understatement.  We will probably never live in such a beautiful place again. 

Anywho - one day I eventually looked at our income and expenses and realized we were still barely making it - even without the debt that we paid off - Our 30 year 5.25% loan ($1800/mo), HOA $1600/year, taxes $3000/year, higher than normal utilities ($500/mo), 30 minutes from town ($30 round-trip @ $1/mile ~10x per week), etc all ate into our wealth - and I had a burning desire to FIRE.  It took me a couple years to warm up to the idea of moving, but I did last year.  I had to find a better job in another area of town before it was worth my time, but boy-oh-boy was it worth my time.

I rolled the proceeds of the house into a cheaper home with a 15 year 2.875% loan ($1400/mo), no HOA ($0/year), lower taxes ($1600/year), normal utilities ($300/mo), walking distance to work ($4 round trip when I drive (about half of the time) - So about $10 per week).  That is almost $2000 savings a month.  I didn't do the math exactly... but that's about right.  I contribute about $1000 more a month to my 401k (sadly this just offsets my previous company match), and I have about $1000 more spending money a month.

My family is WAY better off now - A very good decision for us.  It took us a while to warm up to the idea that we'd be leaving my house that I had worked so hard on, but ultimately it was worth it.  Really I wish I had done it while I was in my debt payoff stage - it would have moved much quicker.

Good luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: OutOfTheAbyss on February 27, 2017, 05:00:30 AM
I had a similar (slightly less dire) situation. I think it's even more embarrassing when you work in finance and end up in this situation- that's how I felt. And yes, every finance job I've held requires a credit check, so bankruptcy just sounds like more fees to an attorney and impaired income.

I sold my 2015 sports car and bought a used 2007 sedan, which eliminated $1000 a month in payments. I had to finance the gap because like you, the commute was long. Still, using Lending Club to finance the gap took off years off payments. It will be gone soon.

I got a 7% interest personal loan from Sofi and consolidated over 50k in 14-24% interest credit cards. I see it dip month after month on Mint and it feels amazing.

I only buy "new with tags" clothes on Ebay. No new clothing from retail at all. If I buy something it's because my work shoes wore out. I also play a game to try to offset it anywhere else.

Think about your commute. I used to earn 30% more at a job with a 2 hour each way commute. The depression and exhaustion from that miserable lifestyle is what prompted me to buy a lot of stuff- clothes, fancy car, spa treatments- I didn't need. I took a lower paying job closer to home and the benefits offset a lot- ($600 less per month in health insurance, extra 4% 401K contributions, thousands less in car maintenance yearly..)  You should look into this. I feel human again, feel more in control of every aspect of my life, and the benefits to my family are priceless. I also have time to cook now and save money and we eat as well as if we were going out.

Declutter- read the Minimalists and similar articles. What can you donate, sell, part with? Look at everything and see if it brings you more enjoyment than getting rid of debt would. I sold a bunch of stuff on Craigslist, ebay, etc. It's also much easier to keep your house clean the less stuff is in it. It's amazing how many clothes I had with tags, brand new never used bike in the garage...text books sold on amazon..

I got our grocery bill down to $480 from $800. I discovered the local produce market and make alternating trips to Trader Joes and the market to buy what's cheaper at each location. I also downloaded Ibotta and my supermarket's coupon app. The trick is not to but it because you have a coupon, but to find good deals and stock up. 

I'm a fledgling compared to other people on this board, but I was able to get my credit back into the 800s (not that I intend to use it) from the high 600s from being in so much debt and refinancing it. I have a house I'd love to sell and can't yet- it's a money pit. I'd consider selling the house if you can and downsizing. I'd look at that as freedom and security and not waiting for some 4-10k expense shoe to drop on you while you're in such a precarious position.

Good luck!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Novik on February 27, 2017, 07:25:05 AM
dashh, I just want to say that noticing and cataloging the habits you want to change and why/when they happen is such a positive step towards changing them. Congratulations on that and best of luck as you start to try and make those changes.

There's a book called The Happiness Advantage which has a chapter on changing habits, and the recommendation is basically to make it easier (mentally/physically) to do what you want to do, and harder to make the choice you'd like to avoid. For example, put the snacks/soda in the garage or basement or upstairs guest bedroom (basically far away from where you eat/watch tv). If you add even 20 seconds to how long it takes you to get them, it'll be a lot easier to avoid them. Another suggestion from the book was to create rules about new habits to avoid depleting your willpower by having to make choices (ie. I can eat snacks on days X Y and Z but only those days, and so the other days there's no argument with yourself about it).


With that out of the way, I think I do need to bring some facepunches to the table here. You are drowning in debt, unhappy with work, and you went out and bought a 50 inch TV for 400$???? Can you return it? Did you confirm the issue was the same and still expensive to fix? Would it have been that bad to step down to a 40" tv? Better yet, could you have lived without a tv for a couple weeks, watching sales, or used listings for a decent tv or projector? All these are the questions you need to start asking before you go out and use money you don't have to try to buy a brand-new luxury item.

I get it, a TV is a nice luxury. In fact, I acquired one for the first time in the last year. But I used a bank promotion related to accounts/credit card openings to get a perfectly nice 28" tv for free, that has some super luxury features like playing videos from USBs. I didn't drop 400$ one weekend on a whim because I couldn't live without a TV for a few days. The point of knowing Mustachian (or even just regular personal finance) principles, is to act on them, not to prepare for facepunches.


And then the car! I get it that you took the car in to a shop for the oil change. I don't change my own oil either right now (rented driveway + fear). But why take it to a shop you don't trust, and then proceed to spend 900$ on their recommendation, without a second opinion, when you don't trust them! With the sting of that money still in mind, now is the time to find a shop you do trust (ask friends/family), and to also price-compare who has the cheapest oil changes (the last city I lived in, it was the Honda dealer, for less than 70$ even with synthetic and in Canadian dollars).


You can dig yourself out of this hole. You can. We all believe in you. But you have to start slowing down and questioning big purchase "needs" or you're just digging yourself in deeper.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: With This Herring on February 27, 2017, 07:28:52 AM
*snip*
We had a pretty rough weekend financially.  First our plasma tv went out on Friday night and so the dilemma of what to do presented itself.  I believe the issue was the same one that happened a year of so ago and the repair would cost almost as much as a replacement.  I know buying a new tv when we are in so much debt is not a very Mustachian thing to do and will draw face punches but that is the choice we made.

I will say that in the past I would have taken this as an opportunity to upgrade tv's (larger and Ultra HD) but I chose the cheapest replacement I could find (that had good reviews) which was a 50" LED for $400 at Walmart.  Again I know this was probably a face punchable decision so I am prepared.
*snip*

First, when, exactly, was the previous TV failure?  Is the TV that just broke the replacement that was purchased 1 year ago?  If it's possible that the TV that just broke is around 1 year old, then dig out the receipt and check!  You might still be covered by the manufacturer's warranty.

Is it something you could possibly fix yourself by looking up info on YouTube?

Why buy a new TV?  I bet with a little searching you could find a TV for much cheaper or free on CraigsList.  You wouldn't necessarily even need to settle for a heavy tube TV.  I am seeing some small flatscreens going for $20 in my area.  And, with an hour drive between work and home, you probably have two CL sites to use.

And Novik said it with the car repairs.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: The Happy Philosopher on February 27, 2017, 08:33:42 AM
Thanks for the follow up and good job.

The TV thing does deserve a face punch though. In addition to being a source of poisonous advertising and time wasting programming, televisions should be nearly free. Craigslist is good place to start. My last tv (Used very infrequently to watch movies) was free on Facebook. I asked my friends if anyone was wanting to get rid of an old television.

But all that aside, this was an opportunity to simply step away and realize you don't need a television. It is a meditative and philosophical exercise to not replace something when it breaks. Doing without something you think you need makes you more bad ass. Use it as a natural experiment to see if television makes you happy. I didn't realize how unhappy watching TV was making me, until I turned it off and didn't watch for a month, then 6 months, now almost never.

Kill your television my friend. Take it back if you can and live without it for a while.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on February 27, 2017, 09:27:45 AM
The soda thing:

How about making a jug of iced tea each week?  You can do an herbal tea if you need a decaf drink in the evening, or just have a hot, herbal tea.  This is how I weaned myself off soda.  It was pre MMM, so I tended to buy the Unsweetened PureLeaf bottled tea for like $2, but it gives a little caffeine kick without the carbonation and sugar from Coke. 

After you return that TV and have some spare time to read instead ;) you might try reading "The End of Overeating" which goes into quite a bit of depth about how junk food is engineered to make you crave more and more.  It helped me quite a bit with getting off that train.  The nice thing is that once you break the cycle, cravings go away and it's easy to avoid eating that crap forever.  Remind yourself that it's not a real reward, and the instant gratification just leads to disappointment later.

Tires:  it's probably too late now, but last time I bought tires, I shopped for them online and purchased them from TireRack.com.  They have a list of installers with prices listed, so you choose the best price installer, and Tire Rack sends them the tires, you set up an appointment, and they mount them for you.  They often have deals like a 4th tire free, or a Visa gift card with a set of 4 or whatever.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ToTheMoon on February 27, 2017, 09:50:39 AM
*snip*
We had a pretty rough weekend financially.  First our plasma tv went out on Friday night and so the dilemma of what to do presented itself.  I believe the issue was the same one that happened a year of so ago and the repair would cost almost as much as a replacement.  I know buying a new tv when we are in so much debt is not a very Mustachian thing to do and will draw face punches but that is the choice we made.

I will say that in the past I would have taken this as an opportunity to upgrade tv's (larger and Ultra HD) but I chose the cheapest replacement I could find (that had good reviews) which was a 50" LED for $400 at Walmart.  Again I know this was probably a face punchable decision so I am prepared.
*snip*

First, when, exactly, was the previous TV failure?  Is the TV that just broke the replacement that was purchased 1 year ago?  If it's possible that the TV that just broke is around 1 year old, then dig out the receipt and check!  You might still be covered by the manufacturer's warranty.


I would also assume that the broken TV was purchased on a credit card.  Does that particular card have any purchase protection?  I know one of ours doubles the warranty period on many goods (not sure about electronics.)

Anyhow, I agree with the other posters that running out and buying a new TV within hours of yours quitting was a huge fail.  I would go to the trouble of returning it, just to teach myself a lesson, then spend some time looking into ALL the options.  If you have a cable package, consider putting it on vacation hold for a couple of weeks and have a tv time-out while you and your wife discuss.

It takes a while until you can flex your frugality muscles, but the TV thing is like doing a workout, then hitting McDonalds on the way home! :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MountainFlower on February 27, 2017, 12:15:28 PM
The soda thing:

How about making a jug of iced tea each week?  You can do an herbal tea if you need a decaf drink in the evening, or just have a hot, herbal tea.  This is how I weaned myself off soda.  It was pre MMM, so I tended to buy the Unsweetened PureLeaf bottled tea for like $2, but it gives a little caffeine kick without the carbonation and sugar from Coke. 


This is how I quit drinking Diet coke as well.  My daily heartburn is now gone.  I don't like regular tea, but I discovered Tazo Zen which is a mint green tea.  I found that if I paired it with Lemon Zinger or Rasberry Zinger along with Truvia sweetener, it was pretty darn good and satisfied that caffeinated, cold drink habit.   If you can switch, you will not only save money but you'll marvel at how much less garbage/recycling you create! 

Also, I eat a ketogenic diet (low carb, high fat) and have endless energy and very few cravings.  You might find something like that or a Paleo diet will help you break the cravings, even if it's just for a month.   Listen to Jimmy Moore's Keto Clarity in your car.  PM me and I can "loan" you my copy for free from Audible if you don't have a membership. 

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on February 27, 2017, 12:53:43 PM
Then on Saturday we took the Pilot in for a routine oil change ($70 which is ridiculous enough since Honda recommends synthetic oil) and ended up dropping $900.  Turns out we needed tires and a new battery plus the front wheel bearings are damaged which will cost another $600.  I passed on the wheel bearings because frankly I didn't trust the shop.  I checked out our warranty and luckily it is covered under the powertrain so IF we truly need the bearings it should be covered by Honda.  That was a relief but I certainly wasn't planning on the tires/battery this month but life happens.

Hey, isn't it amazing how your spendypants car just cost you $900. Its funny how the argument everyone gives for brand new nice cars is that it will be worry free... Well spendypants car uses spendypants tires and spendypants oil and probably a spendypants battery...

Dash, I don't understand how this is an "oh well life happens" moment... New tires is absolutely a non-urgent thing unless you are completely oblivious to the world. Unless you have worn your tires down to no-tread racing slicks then you have at least a couple weeks to turn down the upsell from the jiffy-lube, inspect the tires yourself, determine if they are actually worn out, and research a good cheap tire and where to buy them at the least cost.

Also, if your car started when you drove it in for an oil change then how did it need a new battery? You need a new battery when you get up and turn your car on and the battery wont start the car. Then because you are a 2 car household you can jump start the car and drive it for a battery replacement that day for a minor 2 hour inconvenience.

I believe you fell for the jiffy-lube upsell tactic here that they make all their money on. They are able to do this because most people view car repairs as absolutely essential based on the recommendation of the "expert mechanic" who understands the "incredibly complicated process" of checking the tread on the tires or the wear and tear on your serpentine belts or whatever other crap they try to sell you...

Grow that mustache and question every expense... even the "absolutely essential" ones!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nereo on February 27, 2017, 01:08:34 PM
Then on Saturday we took the Pilot in for a routine oil change ($70 which is ridiculous enough since Honda recommends synthetic oil) and ended up dropping $900.  Turns out we needed tires and a new battery plus the front wheel bearings are damaged which will cost another $600.  I passed on the wheel bearings because frankly I didn't trust the shop.  I checked out our warranty and luckily it is covered under the powertrain so IF we truly need the bearings it should be covered by Honda.  That was a relief but I certainly wasn't planning on the tires/battery this month but life happens.

Hey, isn't it amazing how your spendypants car just cost you $900. Its funny how the argument everyone gives for brand new nice cars is that it will be worry free... Well spendypants car uses spendypants tires and spendypants oil and probably a spendypants battery...
...
I believe you fell for the jiffy-lube upsell tactic here that they make all their money on ...

Might seem a bit harsh, but I'm with CmFtns on this one...
A quick browsing of tires available from tirerack shows you could buy 4 name-brand new tires for <$600 delivered and a battery at CostCo for $80. Add mounting and balancing fees and you're still $150 less than what you spent. Mobile1 Synthetic and a filter run $30 Walmart, and changing your own oil takes 15 minutes. And that's all assuming you needed to get all those things this week, but chances are you didn't.

We've grown up in a society that normalizes and even glorifies spending money.  Step one is to question every purchase, asking "is this truly necessary and/or will this make me happier?" It's a hard notion to dispel, but it's the first step in wealth-building.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Novik on February 27, 2017, 01:16:15 PM
Then on Saturday we took the Pilot in for a routine oil change ($70 which is ridiculous enough since Honda recommends synthetic oil) and ended up dropping $900.  Turns out we needed tires and a new battery plus the front wheel bearings are damaged which will cost another $600.  I passed on the wheel bearings because frankly I didn't trust the shop.  I checked out our warranty and luckily it is covered under the powertrain so IF we truly need the bearings it should be covered by Honda.  That was a relief but I certainly wasn't planning on the tires/battery this month but life happens.

Hey, isn't it amazing how your spendypants car just cost you $900. Its funny how the argument everyone gives for brand new nice cars is that it will be worry free... Well spendypants car uses spendypants tires and spendypants oil and probably a spendypants battery...

Dash, I don't understand how this is an "oh well life happens" moment... New tires is absolutely a non-urgent thing unless you are completely oblivious to the world. Unless you have worn your tires down to no-tread racing slicks then you have at least a couple weeks to turn down the upsell from the jiffy-lube, inspect the tires yourself, determine if they are actually worn out, and research a good cheap tire and where to buy them at the least cost.

Also, if your car started when you drove it in for an oil change then how did it need a new battery? You need a new battery when you get up and turn your car on and the battery wont start the car. Then because you are a 2 car household you can jump start the car and drive it for a battery replacement that day for a minor 2 hour inconvenience.

I believe you fell for the jiffy-lube upsell tactic here that they make all their money on. They are able to do this because most people view car repairs as absolutely essential based on the recommendation of the "expert mechanic" who understands the "incredibly complicated process" of checking the tread on the tires or the wear and tear on your serpentine belts or whatever other crap they try to sell you...

Grow that mustache and question every expense... even the "absolutely essential" ones!

Just wanted to emphasize everything CmFtns said.

If you'r worried, to you don't have to be a mechanical expert; you can get a second opinion. That would be, in my eyes, the bare minimum due diligence before dropping nearly a grand into a car. Quick car service places are always happy to tell you to spend money - but if you take it somewhere else and they don't come up with the same list of things, I'd feel pretty safe the car is fine (and it might be fine even if they list the same things too).

Again, please use these facepunches as motivation to find a garage you can trust, and/or to learn just enough about cars (youtube!) to tell the difference between an emergency and not.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on February 27, 2017, 01:52:09 PM
Then on Saturday we took the Pilot in for a routine oil change ($70 which is ridiculous enough since Honda recommends synthetic oil) and ended up dropping $900.  Turns out we needed tires and a new battery plus the front wheel bearings are damaged which will cost another $600.  I passed on the wheel bearings because frankly I didn't trust the shop.  I checked out our warranty and luckily it is covered under the powertrain so IF we truly need the bearings it should be covered by Honda.  That was a relief but I certainly wasn't planning on the tires/battery this month but life happens.

Hey, isn't it amazing how your spendypants car just cost you $900. Its funny how the argument everyone gives for brand new nice cars is that it will be worry free... Well spendypants car uses spendypants tires and spendypants oil and probably a spendypants battery...
...
I believe you fell for the jiffy-lube upsell tactic here that they make all their money on ...

Might seem a bit harsh, but I'm with CmFtns on this one...
A quick browsing of tires available from tirerack shows you could buy 4 name-brand new tires for <$600 delivered and a battery at CostCo for $80. Add mounting and balancing fees and you're still $150 less than what you spent. Mobile1 Synthetic and a filter run $30 Walmart, and changing your own oil takes 15 minutes. And that's all assuming you needed to get all those things this week, but chances are you didn't.

We've grown up in a society that normalizes and even glorifies spending money.  Step one is to question every purchase, asking "is this truly necessary and/or will this make me happier?" It's a hard notion to dispel, but it's the first step in wealth-building.

Nereo, I also looked at tires and battery prices and found similar prices and DASH, I don't mean to be harsh at all btw... it's just about getting the point across about changing the mindset of money and questioning every single expense.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on February 27, 2017, 02:04:47 PM
Again, please use these facepunches as motivation to find a garage you can trust, and/or to learn just enough about cars (youtube!) to tell the difference between an emergency and not.

Hey, isn't it amazing how your spendypants car just cost you $900. Its funny how the argument everyone gives for brand new nice cars is that it will be worry free... Well spendypants car uses spendypants tires and spendypants oil and probably a spendypants battery...
...
I believe you fell for the jiffy-lube upsell tactic here that they make all their money on ...

We've grown up in a society that normalizes and even glorifies spending money.  Step one is to question every purchase, asking "is this truly necessary and/or will this make me happier?" It's a hard notion to dispel, but it's the first step in wealth-building.

Nereo, I also looked at tires and battery prices and found similar prices and DASH, I don't mean to be harsh at all btw... it's just about getting the point across about changing the mindset of money and questioning every single expense.

And to add, to apply the lesson learned to the next problem that faces you, whether that's running out of an ingredient for a recipe you want to make (can you substitute something you have in the house rather than running to the store, or make a similar recipe for which you have all the ingredients) or a piece of clothing that wears out (can you do without for a while until you find a replacement at the thrift store or on sale) or a home repair that's needed (can you fix it yourself, or trade service with a friend who can), etc.

Honestly, I'm surprised, both about the TV thing and the car thing. 

But then, you did say that you have pretty good self-awareness but trouble taking steps.  Seems like you maybe need more self-awareness to figure out why you have such trouble with taking steps/making difference choices. 

Are you missing a keystone habit?  (I just posted about these somewhere else - some reading:  http://jamesclear.com/keystone-habits (http://jamesclear.com/keystone-habits)  http://www.huffingtonpost.com/charles-duhigg/the-power-of-habit_b_1304550.html  (http://www.huffingtonpost.com/charles-duhigg/the-power-of-habit_b_1304550.html))

Are you an abstainer rather than a moderator, in which case you might need a total, hard and fast rules "No Spending Month" to break your tendency to throw money at a problem:  https://gretchenrubin.com/happiness_project/2011/04/quiz-are-you-a-moderator-or-an-abstainer-when-trying-to-give-something-up/ (https://gretchenrubin.com/happiness_project/2011/04/quiz-are-you-a-moderator-or-an-abstainer-when-trying-to-give-something-up/)

What do you know about yourself in terms of personality traits, that affect your consumer behaviour - in terms of materialism, compulsiveness, hedonistic adaptation, etc:  http://www.beyondthepurchase.org/blog/01/what-do-personality-traits-tell-us-about-consumer-behavior/  (http://www.beyondthepurchase.org/blog/01/what-do-personality-traits-tell-us-about-consumer-behavior/)

I say this as someone who is figuring things out right alongside of you, not as someone who's judging you.  For example, I had the recent realization that when I'm stressed about my financial situation, I want to DO something about it.  I start searching for sales, and "stock up" my groceries - many months worth! - so that I get a good price.  Only thing is, in the long run, I'd be better off not to stock up so far ahead (on things that regularly go on sale every couple of months) and use that money NOW to pay down my debt.  Much as I want to DO something to pay off my debt, what's actually going to get me there faster is DOING LESS spending.  Refraining.  This is a huge realization for me.  I had to unsubscribe to any chain store emails I was signed up for, I've actually minimized my coupon clipping (because sale prices + coupon is almost too much for me to resist) etc.  I had to understand, acknowledge, and learn to work around the fact that I succumb to sales.  That's (one of) my thing(s) to work on. 

So what's yours?  What's the common thread in your reasoning about these two situations that cropped up, the TV, and the tires?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: englishteacheralex on February 27, 2017, 04:19:56 PM
Oh man the car repairs thing...I used to just whip out my checkbook whenever I went to Goodyear to buy every darn thing they told me I needed. Every time. A $40 oil change would ALWAYS turn into $500+ on brakes, tires, the flux capacitor...then I got married and my husband scoffed at all that. He never lets me get the oil changed because I always want to sign on the bottom line for everything. We drive old 100k+ mile vehicles that we buy for less than $4k, so I always felt I ought to pay through the nose for maintenance.

Husband youtubes everything and does all minor repairs himself. Also got a mechanic we trust. We now pay much, much less for maintenance and the cars keep running just fine. Jiffylube, Goodyear etc. really are a racket.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on February 27, 2017, 05:56:44 PM
Here's another vote for returning the TV you just bought.  Put $300 from the return directly towards your debt.  Then taking a couple of weeks to shop Craigslist for a <$100 replacement.  I know that with kids, it's hard to downsize.  But it is possible to delay. 

We got rid of our TV ten years ago. Periodically my husband talks about getting a television, but in the end we've decided to wait till my mother finishes downsizing and gives us one of her four televisions.  Free TVs are easy to find.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on February 27, 2017, 08:52:31 PM
First, I also suspect you got hosed on the car stuff.  One thought: could you have fallen for the tyranny of the "busy"?  You have jobs with long commutes, and small kids, and you're trying to tackle all your debt and learn new habits and all that stuff.  And then something went wrong, and you thought, well, crap, NOW I have to spend time getting a second opinion on the cars and pricing tires and batteries and seeing if I can YouTube stuff to do myself and researching TV prices and alternatives on Craigslist and then I won't get to enjoy any downtime or spend time with my kids -- so screw it, I'll just take care of this all RIGHT NOW because I don't have the headspace to add all that in with everything I'm already doing.

I don't know if this is you, but like PJ said, you need to consider the "why" of this all so you can be armed against it.  Maybe this was an extinction burst; maybe the stress of changing your ways built up until your old ways found a more socially-sanctioned way to burst through ("safety" and "it's a deal" being the excuses du jour).  But it could also be because you just feel overwhelmed by the mental effort involved in adding two more decisions to optimize when your life is already overly full.

Note that I tend toward the overwhelmed-by-choices issue myself, and it's just so *easy* to make problems disappear quickly with the application of a large sum of cash.  If this sounds familiar, then may I suggest adding a fair bit of "buck up, buttercup" to your self-talk -- you can do this, you can and will find the time to make the decisions that matter to your family's future, so don't let your lizard brain convince you that you can't.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: homestead neohio on February 28, 2017, 06:38:57 AM
+1 to "buck up, buttercup" self-talk. 

Next time you are about to do something that you know will bring facepunches, stop.  Then don't do it.  Then figure out what everyone here would tell you to do instead.  Then do that.  I really think you are getting the whole philosophy, and why it is good.  You just need to do the steps.

I mean, your hair is on fire and you went to buy a brand new TV at retail price!  Take it back! 

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on February 28, 2017, 07:10:10 AM
Hey, forgive me if I missed the post, but have you put your truck up for sale yet? What movement have you made there?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Zoot on March 01, 2017, 09:07:02 AM
I mean, your hair is on fire and you went to buy a brand new TV at retail price!  Take it back!

And then go to Goodwill, where you can buy a CRT TV for < $10.  You can't even give those things away these days, and my local Goodwill has dozens to choose from--I'm assuming yours will have something similar.

Then use the fact that you're watching a CRT TV to spur yourselves on to pay off debt.  Put $40/month in a "TV savings" account and buy one for yourself at an after-Christmas sale, in cash.

It's all about playing games with yourself.  :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ChasingStache on March 01, 2017, 11:46:20 AM
dashh,
Congratulations on taking the first steps and sharing your story. You aren't the only one out there in this situation, and you aren't even the worst out there.  Reading your story has me thinking a lot about close friends of ours. Here is their situation they have put themselves in in the last 2-3 years alone.

Everything above is financed in some way.

Upcoming expenses:

This is just what I know of. They are great people but just buried and they don't even realize it yet. They probably make around  $150k/year. This also is a solvable problem similar to yours, but the first step is realizing it, the second is to take action.

I hope when they are ready, I can use your story to help inspire them and show it can be done.

Good luck and remember, you have the chance to show others it CAN be done! Don't just be a leader for your family, you can make a bigger mark!

Cheering from CO!

ChasingStash

**Edited for grammar and spelling. DOH!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: meandmyfamily on March 01, 2017, 11:58:33 AM
When we were struggling to quit justifying our spending it really helped to have a no spend weekend-literally we never spent a dime or left the house unless it was on a bike or foot the entire weekend.  Then we would have the occasional no spend week and we only allowed gas for driving to work.  We drew a line in the sand and said we will NOT spend for this time period.  It helped us realize a TON of things.  Things we thought were "emergencies" were not.  It helped figure out priorities and made us stop and think about what really mattered.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 02, 2017, 02:29:46 PM
I'm glad you shared your reflections, dash.

Not because you "owe" us any explanations (except by some social capital calculation in which those of us who have spent time and energy offering suggestions feel repaid by observing you move toward living in a fashion we deem acceptable) but because I suspect that writing out those reflections helped to solidify them in your mind.

Also, I had noticed you didn't post again for a bit, and was worried that you'd chickened out after this round of face punches.  So I'm glad to see you back!

On the truck and getting wife on board fronts - two birds with one stone.  Lead by example.  The fix is done, what do you need to get the truck sold?  Take pictures.  Write out a description.  Open up accounts with CL, kijiji, or wherever you're going to try to sell it.  Anything else?  Ready, set, go!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on March 02, 2017, 02:31:24 PM
When I first started really analyzing my spending, I realized I was wasting so much.  I cut back, but continued smaller amounts of wasting.  This made me cognizant of the waste each time it happened, and it is becoming more and more uncomfortable daily.

At the same time, it is increasing my happiness to see how much I cut my spending in February.  It really gives me hope that I'll get out of my debt if I keep at it.  I now know for a fact I can keep my spending <$3k a month, where I was spending $4k+ on average before.  Now I'm challenging myself to keep it under $3k, and it's super motivating.

Not sure if this helps at all, but I hope it does.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: homestead neohio on March 02, 2017, 02:35:49 PM
Hello all,
I took some time to process and take all the posts in and first just want to thank everyone for the face punches. ...
Thanks again for the support – it really helps.       

Way to take those face punches on the chin and get right back on board!  This is a process, you are taking the corrections with the right attitude!  Keep it up!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on March 02, 2017, 08:54:32 PM
I know that is very obvious to ya’ll, but until recently it just hasn’t been to us.  I have always hated the debt but over the years (and even now) still continued to make choices financially that just perpetuate our situation.  So my challenge is helping my DW see like I see and also to translate that into new behaviors/habits.   

Thanks again for the support – it really helps.       

you are right that it seems obvious but many of us have been doing this for a long time and even before MMM I know at least I was naturally very frugal. I like following a story like yours because watching the advice of people on this forum foster a turnaround story is such a great motivation for all of us to keep at it. It's incredibly frustrating to have this mindset, knowledge, skills and goals which cannot be shared with anybody because at least in my experience the whole real world rejects it. I use this forum as really the only place to talk about this kind of stuff and to see someone new come in and actually accept advice and turn their life around is so cool.

keep it up!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Villanelle on March 02, 2017, 09:41:01 PM
Don't "consider" returning the TV.  Do it!  You have 2 perfectly functioning TVs in your house already, one of which is less than a year old.  (Yes I know you need to talk to the wife and make this a joint decision, but it sounded from your post like you are fully set on that plan yourself.)

Also, you seem like someone who would benefit greatly from a cash-only system, since impulse buys tend to be a problem.  If' you'd had to go pull out cash from an ATM for that TV, would you have been less likely to purchase it? Or better yet, if you'd had to go home and take money from various envelopes marked "groceries" "Debt repayment" "kids' activities", because literally every penny you have to spend for the month is allocated already--and not just in a spreadsheet, but the actual dollar bills-- would you have taken $150 from groceries knowing that meant ramen and beans and rice for 2 weeks, or from "debt repayment", knowing that it would push out your goals even further?  (If you do this, I recommend calculating a full debt repayment schedule and putting it on the envelope each week so that you know taking $100 out means you won't meet that deadline.  Or better still, paying down the debt first so there isn't any lingering money to steal from.)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 02, 2017, 09:58:56 PM
Don't "consider" returning the TV.  Do it!  You have 2 perfectly functioning TVs in your house already, one of which is less than a year old.  (Yes I know you need to talk to the wife and make this a joint decision, but it sounded from your post like you are fully set on that plan yourself.)

Also, you seem like someone who would benefit greatly from a cash-only system, since impulse buys tend to be a problem.  If' you'd had to go pull out cash from an ATM for that TV, would you have been less likely to purchase it? Or better yet, if you'd had to go home and take money from various envelopes marked "groceries" "Debt repayment" "kids' activities", because literally every penny you have to spend for the month is allocated already--and not just in a spreadsheet, but the actual dollar bills-- would you have taken $150 from groceries knowing that mean ramen and beans and rice for 2 weeks, or from "debt repayment", know that it would push out your goals even further?  (Is you do this, I recommend calculating a full debt repayment schedule and putting it on the envelope each week so that you know taking $100 out means you won't meet that deadline.  Or better still, paying down the debt first so there isn't any lingering money to steal from.) 


Oh, that's another good suggestion! 

dashh, have you ever seen any episodes of Til Debt Do Us Part?  It's a Canadian show, off the air now, but you can check on episodes and clips on youtube:  https://www.youtube.com/results?search_query=til+debt+do+us+part+full+episodes (https://www.youtube.com/results?search_query=til+debt+do+us+part+full+episodes) 

The host has families live with a cash budget, kept in jars rather than the envelopes Villanelle has described, but same idea.  Also, as you watch the full financial picture revealed for those couples, it may help to sink in where your own finances are.
Title: Reader Case Study - $231k in debt and need help!
Post by: elaine amj on March 02, 2017, 10:32:54 PM
Dashh: u use YNAB right? I remember u mentioning that before. It is based on an envelope system. Have u gotten to the point where u let your budget guide your spending? Its a tough step (one I have been fighting) - but if u are able to do it, it will help u so much with impulse decisions like these.

I struggle with this a lot and am super proud that this past week, DH was pushing to go out to eat but we only had $4+ left in our dining out category and I somehow found the strength to keep repeating "no". I was so close to saying yes and just moving the money from another category. But then realized that the discipline is good for us. Especially since my DH is off sick and his income stopped at the end of January. Its a very small thing to be proud of - but baby steps. I figure if we can get in the habit of letting our prior decisions govern our spending, we are less likely to spend impulsively.


Sent from my iPhone using Tapatalk
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ShoulderThingThatGoesUp on March 03, 2017, 06:59:21 AM
Listing a car on Cars.com (I have done better there than on Craigslist) takes like 20 minutes if not less. Get it done.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: cats on March 03, 2017, 09:22:50 AM
One more thought on the TV: you mention that you want to improve your health, then also mention that you have a tendency to drink soda and snack while watching TV in the evenings.  It sounds like the TV is contributing to your poor health!  How about returning the TV, and then replacing TV time with things like reading to your kids or playing games with them (if it is "down time" for them also), chatting with your wife about how her day went (if she sees a more attentive/caring husband as an outcome of no TV, she might be more inclined to stay on board with the decision), going for a walk around the block, doing some work around the house that you might have previously outsourced (can't remember if you had a cleaner in your initial costs, but if you've cut that, spending 15-20 minutes vacuuming and picking up each night will go a long way), or packing your lunch for work the next day (or your wife's lunch or your kids lunch)?  Or even just use the time you would usually spend on TV to go to bed a little earlier--with your long commute I imagine you must be chronically short on sleep. I know when I am sleep-deprived I am much more inclined to make all sorts of bad/silly/stupid decisions.

I notice that when my husband and I turn on TV in the evenings, we have a tendency to go to bed later and later and get more and more tired as the week goes on.  And I'd say snacking and TV often go together for us too :)  This week we actually resolved "no TV on weeknights". It's now Friday and I'm feeling pretty energetic, I knocked out a few little tasks during the evenings that I'd been procrastinating on, our kitchen is way tidier than it usually is by Friday because either my husband or I have been doing dishes and such each evening rather than letting them pile up, etc.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: englishteacheralex on March 03, 2017, 09:54:02 AM
^ Well that was very motivating/inspiring for me! No tv on weeknights, what a great idea! Not too late to start on that for lent, I think.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 03, 2017, 12:10:06 PM
^ Well that was very motivating/inspiring for me! No tv on weeknights, what a great idea! Not too late to start on that for lent, I think.

(Psst... come and join us in the Lent 2017 thread in the Throw Down the Gauntlet section of the forum!)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: mustachepungoeshere on March 05, 2017, 06:58:14 PM
I have not made much progress on the health front yet (soda/junk food) but I have started to notice my habits/patterns.  In terms of soda, I definitely see a pattern of only wanting it when I eat certain foods.  In other words, when I eat something healthier I would prefer to have water or tea.  But if I am going to have pizza, burgers, etc. (bascially fast food) I have to have a soda.  The other time I always have one is in the evenings when I snack while watching tv (junk food and a soda).  This habit has been around a long time and is really bad for my health in general, but especially since I have had issues with acid reflux.  For acid reflux, the worst thing I can do is eat anything before bed but especially not junk food and soda. 

Watch or read as many of these as possible and learn more about how (and why) to break the sugar cycle.

That Sugar Film
Jamie Oliver's Sugar Rush
Fed Up
Sweet Poison
The Great Aussie Bloke Slim-Down

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PDXTabs on March 06, 2017, 10:47:24 AM
We are located around the Raleigh area of NC.

I'm new to MMM but not new to these problems. When I was 24 I woke up to a very similar situation which eventually lead to a divorce and a foreclosure. However, now I am 34 with 1x my salary saved in my 401k and my student loans paid off. By MMM standards I'm in poor shape but I've lived through a lot of what you are talking about, came out better for it, and am still making improvements. The hardest part for me is psychological. You really need to convince yourself that this is not how humans were meant to live. This is not how middle class people in other countries live, and it is not how Americans lived 80 years ago.

Please go check out Your Money or Your Life from the library and read it. You are trading your life to service debt for consumer goods. The sooner you stop the better. Also, even by spendthrift American (not MMM) standards you are way behind in saving for retirement https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire (https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire).

If I were you I would find a 2 bedroom apartment close to your wife's work for $1000/mo or less and try to figure out how to get by with one car. The happiest I ever was with my (now ex) wife was when we were crammed into a two bedroom apartment with three kids and got by with a $1200 car. We didn't have a lot of space but we also didn't have any stress about money. I rode my bike any time that she needed the car and my health greatly improved. Unfortunately for reasons that weren't strictly financial our marriage eventually failed.

If you insist on staying in a house you could learn how to change your own oil and batteries. Mobil1 is $25 for 5qt at Walmart and the oil filter for my car is $4 on Amazon.

EDIT - Also, I've never paid for a TV in my life. I can't imagine paying for a new one when you had a spare!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Larsg on March 06, 2017, 10:17:22 PM
First of all, congratulations on having the courage to make a start and stare down your challenging situation! Baselining where you are is a very first step. I won't go through all the line items as I see lost of good advice already posted. The most important thing is to NOT be discouraged. Many of us have been through similar experience so look at it as an incredible learning opportunity on the path to a richer, freer life. I'm going to pick perhaps some of the most simple things to do that I did when I got into debt when I was young - and yes, I lived to see a far better side.

Let's start w/the debt first as finding a new job is stressful, time consuming and may not help if you don't get the debt under control.

- Cars - sell, buy in cash as you recommended something reliable but still nice that gets good gas mileage. Toyota, Honda, some others folks have mentioned.

- Credit Cards, first call them and just ask if they will lower your interest rates and then use every opportunity you get to do zero balance transfers. Start with the highest, then once paid off, work your way down.

- Kids, make sure you and your wife agree not to have any happy accidents. Now is not the time.

- Now to earnings and I encourage everyone who needs to earn more to do this - apply for jobs at the big software firms if even if you have no tech skills. If you have a functional background in Finance, HR, Legal, general business, these firms also have many many jobs that help them "Run the Business." As they grow, so too do those departments. Why in tech - because they pay more...a lot more. A lot more in that it's worth it to move to where they are - I would look in texas as Tech is growing (Dell, Intuit (Small but there), Texas Instruments, many others). The also offer stock/options and bonuses. If you you want ere, the new blue chip is the tech chip to make a start. If you get rejected, try try again and again and again. You will get a sing on bonus (there is 10K for your cc bill), you will get a relocation package in some instances, even lower management if you have a skill they need and finance is always a skill that is needed; you will get an annual bonus - there is another 5-10k for your cc's, and then if you rise, so too does your bonus. You will get stock and options, there is another 5-30K for your cc's and so on.

Don't let anyone tell you it can't be done. Although I am no longer in tech, semi retired, we hired all kinds and my BA was general bus and english and I had zero trouble getting into the tech industry.

Best of luck to you.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: DanishMM on March 07, 2017, 12:15:48 AM
Hi!
I have been lurking on this thread for a while because it's so inspiring! Way to go with the honesty and how you're tackling face punches!

I have been in a similar situation and what really turned everything around was getting my husband on board. I realized he needed to see the point. He loves his job and couldn't consider retiring 20 years ahead of time. What convinced him was seeing the opportunities FI could give us…We calculated that living 20 % mustachian would mean I could retire at the same time as him. (I am 10 years younger) 50 % musician would give us the freedom to go unemployed if we got sick of our jobs and needed time to find something interesting. 80 % would give us A LOT of money when retired to give us freedom to travel, do philanthropy, help familymembers (which could be a real thing) or whatever…These numbers are of course arbitrary but my point is that whenever we get bitten by consumerism, it really helps to see what the end goal is other than "pay off debt".


Have you talked to your wife and defined a goal? It could be: work less, work but with the freedom of being able to quit, save for college. Whatever it is I think its crucial. When you have a goal then suddenly "the eating out", the cars, the tv, everything becomes stealing from that goal….

Cheering for you!

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SwedishMoustache on March 07, 2017, 02:17:06 AM
Holy moly.

Well, you've taken really important first steps here. It's awesome. It's people like you, people deep in the muck who are willing to grab a rope and drag themselves out that are the real people to admire.

You can do it - seconding the advice given here. The real important step is to get your DW to see it as you do. Set goals. Weekly goals. Monthly goals. Annual goals. Achievable goals.

We're all rooting for you :).
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Scortius on March 07, 2017, 08:39:12 PM
I love this thread! 

I just want to chime in with a separate consideration.  One of the MMM tenets that I love is to revel in the absence of convenience.  More specifically, you should try and do things by yourself that you would normally pay other people to do.  Once you try new things, you can be amazed at how quickly you pick up new and incredibly valuable skills.

Why do I mention this?  Well, your TV just blew out and it's not something you're willing to pay to get repaired.  Are you planning on throwing the broken TV out?  DON'T!

Capacitors go out all the time (just Google around for 'busted capacitor'). They're incredibly easy to fix yourself, you simply need an extremely cheap replacement capacitor and a soldering iron.

Do you know what is fun?  Opening up a 50" Plasma TV!!!

If you were not going to get the TV repaired, then you have nothing to lose by opening it up.  And, there's just a small chance that you might teach yourself how to fix a large number of your electronic devices for pennies on the dollar.

Top hit on amazon.com: https://www.amazon.com/Samsung-Plasma-Capacitor-Repair-Replacement/dp/B0044J4U2W

Do your due diligence (don't buy electronic parts from China), read some different approaches, watch a youtube video or two: https://www.youtube.com/results?search_query=samsung+plasma+capacitor+replacement

Playing with massive electronics?  Saving tons of money?  Fixing your televison?  Sounds like a great way to spend a few hours to me!

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on March 08, 2017, 06:01:45 AM
I love this thread! 

I just want to chime in with a separate consideration.  One of the MMM tenets that I love is to revel in the absence of convenience.  More specifically, you should try and do things by yourself that you would normally pay other people to doOnce you try new things, you can be amazed at how quickly you pick up new and incredibly valuable skills.

Why do I mention this?  Well, your TV just blew out and it's not something you're willing to pay to get repaired.  Are you planning on throwing the broken TV out?  DON'T!

Capacitors go out all the time (just Google around for 'busted capacitor'). They're incredibly easy to fix yourself, you simply need an extremely cheap replacement capacitor and a soldering iron.

Do you know what is fun?  Opening up a 50" Plasma TV!!!

If you were not going to get the TV repaired, then you have nothing to lose by opening it up.  And, there's just a small chance that you might teach yourself how to fix a large number of your electronic devices for pennies on the dollar.

Top hit on amazon.com: https://www.amazon.com/Samsung-Plasma-Capacitor-Repair-Replacement/dp/B0044J4U2W

Do your due diligence (don't buy electronic parts from China), read some different approaches, watch a youtube video or two: https://www.youtube.com/results?search_query=samsung+plasma+capacitor+replacement

Playing with massive electronics?  Saving tons of money?  Fixing your televison?  Sounds like a great way to spend a few hours to me!

I love this.  It really is all about the mental attitude.  I have had people be amazed that I bake bread and such -- "oh, I couldn't do that."  Umm, yeah, you could.  What's the worst that happens?  It doesn't rise and it sucks and you throw it out.  And?  I mean, I really, really don't get what people think is so hard about that that they won't even try -- it's just the intimidation factor. 

Then again, I have the *exact* same reaction with things like replacing bad switches and such, so I totally get where it's coming from.  Luckily for me, I have DH to do that stuff (E.E. = at least he won't burn the house down).  But the reality is that I am a capable, competent human being who could figure out how to do that.  And changing your mindset from "oh, I couldn't possibly" to "let's figure this out" opens a ton of doors that you didn't even realize were closed.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BlueHouse on March 08, 2017, 12:48:54 PM
^ Well that was very motivating/inspiring for me! No tv on weeknights, what a great idea! Not too late to start on that for lent, I think.
I might jump on that too!  I hate the fact that I've let TV back into my life.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Walsh1122 on March 08, 2017, 05:48:37 PM
Posting to follow, Rooting for you Dash!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 08, 2017, 11:25:07 PM
I'm checking in too, dashh.  Haven't seen you post recently.  Hope you'll check back in with us.  Not only are we rooting for you, we really do understand how hard it can be to make all the changes necessary.  Stick it out for the long run, and we'll be with you all the way!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ysette9 on March 09, 2017, 01:54:45 PM
Those are great steps. Come back when the truck is listed for sale for another round of virtual high fives. :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on March 09, 2017, 01:59:34 PM
Good steps you're taking!

I look forward to seeing the update on your debt totals after you sell the truck, get the bonus, and pay things off this month!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Novik on March 09, 2017, 02:05:36 PM
Good steps you're taking!

I look forward to seeing the update on your debt totals after you sell the truck, get the bonus, and pay things off this month!

Seconding this - can't wait to see an updated list with new totals, and the ones you've paid off crossed out. 8/20 debts would be amazing progress, but please for all our mental health, pay off "Loan #1   $4,676   35.90%   $177".  The interest rate is abysmal, and if you include that I think you could still pay off ~6 loans (loan 1+3, CC 1,2,9 and frontier loan).
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on March 09, 2017, 03:09:00 PM
Could you make it 9 debts if you return the TV?  :-)

Come on, you know someone has to say it -- it's out of love.  You are really making great strides, and I am in actuality very proud of you; you have done things that involve significant blows to the ego and self-image, and yet you're still here coming back for more and executing the plan like a champ.  Yay you!  *But*:  That avoidance of hard conversations is something that will really hold you back -- I have a feeling that habit/preference played a significant role in how you got into this position in the first place, and so that is one of the behavioral changes you will need to make to maintain long-term success. 

[Yes, I am again being presumptuous, because I don't know you or what's in your head.  But I know that I myself absolutely dread hard conversations and do anything to avoid them, as if the issues will magically go away on their own if I avoid them long enough.  Hint:  they don't.  I had to learn that things are always better when they are faced head on and early, before they have a chance to spiral out of control.  I am trying here to help you move about 20 years ahead of me on that particular learning curve].

Tl;dr:  Return the TV.  Not because you need the $400 (although of course you do).  Because you need to learn how to tell your wife you need to return the TV.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: freya on March 09, 2017, 04:29:10 PM
This is an outstanding and inspiring thread.  Dashh, I hope you keep posting regular progress reports!

I've noticed a lot of phrases like "in the next month or so", "planning to", "considering" etc.  I know you're doing a great job psyching yourself up to take all the great advice you've been getting, but I think it would do you a world of good to Do Something Right Now.

So how about this.  Get online right nowand pay off your smallest loan, using cash from savings.  Then repost a list of the debts with that one crossed out, or moved to a separate "Paid Off" list.  Hopefully, that will help motivate you to work on the truck sale this weekend.   The next time any income (paycheck, sale) comes in, calculate how much of it can go towards debt and then immediately pay off one of those high interest credit cards (like that 35% job) with whatever is left over after making minimum payments.  Then proudly post your new list!

I'd keep the rest of your savings in the meantime, for situations like that $900 car repair.  It's the slimmest of emergency funds.  After selling the truck, go through your house & closets with a fine tooth comb and get rid of anything you aren't using.  Donate it to goodwill and claim the tax deduction, or sell it on Craigslist or Amazon.  This will accomplish three things:  1) you'll pick up some extra cash which you can then put toward debt payments, 2) it will help prepare you to move, and 3) you'll feel like you've lost a huge weight of stuff purchased on those credit cards that's been weighing you down.

Also for a perspective on giving up the big house in favor of renting close to work:  I convinced my sister to do something similar.  She put her big, beautiful home on Airbnb and the family moved to a small rental house within walking distance of her kids' school and a nice downtown.  She had been spending $1000/month on gas shuttling kids around and driving 45 minutes to the grocery.  She almost cried tears of joy telling me how happy she is with the new living situation - and on top of it, the Airbnb income is more than enough to cover the rent.  She just had to buy a lockbox for key exchanges and a lock on the door to the room where they piled all the belongings they left in the house, and arrange for cleaning services.    You might want to do something similar, especially if your home sale will cost you $$ out of pocket given how little equity you have.  And, you'd be able to move as soon as you like with a lot less hassle, and it won't be an irreversible decision.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 09, 2017, 07:50:33 PM
Man, I am glad to see your update!

Sure, I wish the TV had been returned (and please, read Laura33's post again, and really ponder it!)  But trimming those monthly bills is good.  And having an actionable plan to get the truck listed, with a timeline set, is also good.  Developing a plan for how you'll use your extra money to pay down debt, also good. 

Please do come back real soon, and give us the updates on taking the steps.  Like someone said, we'll be here for high fives and to continue cheering you on!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Paul der Krake on March 09, 2017, 08:13:40 PM
This is great. Keep at it and you will be out of the hole in 2-4 years.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ToTheMoon on March 10, 2017, 10:38:13 AM

Thanks for this it was very helpful!

Ok, I just called and paid off the remaining balance of Loan #3.

Loan #3   $882   20.00%   $284

I am running out to the bank and lunch to pay off the Frontier and I am listing it on CL tomorrow.

Also, last night instead of just sitting on the couch and wasting time on my tablet I decided to clean all of the bathrooms in the house.  It felt good to actually do something productive around the house during the week.   

This is AWESOME!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RidetheRain on March 10, 2017, 10:51:08 AM
It's great to watch you make progress dashh. Just a tip from someone else in the negatives. I (try to) think about purchases in terms of time. My Dad used to say "Monday is for the government and that's why it sucks so much". Because every cent he earned on Mondays went to taxes.

Using a wise man's philosophy, we can point at individual purchases to see if they are "worth it".
For example, I want a Starbucks coffee right now because it's 9:30 and I haven't had my caffeine.
That coffee usually costs me about 7.50 and I toss the extra in the tip jar to round to $10. If I used that $10 to pay off my car loan (I get punches in my own case study) then I would save $10 plus the 3 years worth of interest on that $10. Say that works out to $12.
My hourly wage minus commuting, taxes, etc means that I would work roughly a half hour for that coffee. Every time I want one. Do I want that coffee more than I want to leave at 4:30? On a Friday?

For me, $10 = 1/2hour is a powerful deterrent, but scale up to your tolerance.

That doesn't even get into potential stock market returns because that math is too hard for someone without coffee. Keep a couple of these calculations in your head and you start getting angry at the coffee shop for stealing your life. I won't get into the TV here, but I'm guessing it is "worth" more than a few hours of work considering your snowballing.

In the meantime, congratulations on the most recent loan payoff! I love getting to see the successes on these. People often take the advice and run with it without progress notes. You sparked a lot of interest and we're all invested now :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 10, 2017, 11:57:47 AM

Thanks for this it was very helpful!

Ok, I just called and paid off the remaining balance of Loan #3.

Loan #3   $882   20.00%   $284

I am running out to the bank and lunch to pay off the Frontier and I am listing it on CL tomorrow.

Also, last night instead of just sitting on the couch and wasting time on my tablet I decided to clean all of the bathrooms in the house.  It felt good to actually do something productive around the house during the week.   

This is AWESOME! 

Thanks for the support!

Ok, truck is now paid off.

Auto loan #2   $1,172   3.84%   $525   Nissan Frontier

It feels pretty good since I have NEVER owned a car outright before.  But it will feel even better to sell it, get something more fuel efficient and be able to pay off a few high interest loans!

I am actually thinking about getting a manual car since I have never learned to drive stick.  I read MMM’s post about that and it really inspired me.  I have always wanted to learn but as I got older just let it go.  I think learning a new skill (my wife can drive stick) is just what I need right now and someday I can teach my sons. 

I am unreasonably and excessively pleased about a complete stranger on the internet having two less debts to pay on every month.  You are inspiring! 

While you still need to see how much you can get for the truck, and how much of the proceeds you'll need to spend on your next car, I'm wondering...

Have you done the cash flow math yet? 

Do you know, that's $809 you've freed up from your monthly debt payments?

Please, tell us, which debt is that going to next?  How long, at that rate, will it take to pay off the next one? 

Inquiring minds need to know...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Novik on March 10, 2017, 12:04:13 PM
I am unreasonably and excessively pleased about a complete stranger on the internet having two less debts to pay on every month.

Same.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: wintertell on March 10, 2017, 12:09:00 PM
I am unreasonably and excessively pleased about a complete stranger on the internet having two less debts to pay on every month.

Same.

Make that three folks!!!!! Congratulations! Dash to the rescue, to rescue Dashh! ... OK now I'm just being silly. : )
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Laura33 on March 10, 2017, 12:29:15 PM
Dashh, I am sort of irrationally happy for you -- two down and almost $900/mo in extra cash??  Just like that!  Huzzah!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 10, 2017, 12:53:37 PM
Fantastic! 

284 + 525 + 177 + 194 = $1,180 to snowball

So CC#9 ($1,000) only has one more month to live! 

*rubs hands together gleefully*

You're killing this!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: rpr on March 10, 2017, 01:01:19 PM
Fantastic! 

284 + 525 + 177 + 194 = $1,180 to snowball

So CC#9 ($1,000) only has one more month to live! 

*rubs hands together gleefully*

You're killing this!

There is something magical about watching that snowball grow.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: freya on March 10, 2017, 01:50:53 PM
That's 5 debts either gone or with less than one month to live!!  Isn't this exciting?  And easier than you probably thought initially?  When your wife's bonus payment comes in, have a wonderful time paying off that usurious 35% loan and then show us a list with 3 loans crossed out.  I must say this is more fun than watching the Super Bowl!

Best of luck with Craigslist this weekend.  Look out for the scammers though.  And have fun with the housecleaning.  Doesn't it feel great to clear junk out of your life?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BlueHouse on March 10, 2017, 01:53:29 PM
current plan is as follows:

1)    My wife’s bonus hits next week so I am using that plus some of savings (~$1k) to get rid of Loan #1.

2)   I was going to pay off Loan #2 with some savings as well.  That should leave us around $4k - $5k in savings and get rid of the two super high interest loans.

3)   Next we can use start using our snowball on CC #9.

4)   Use the proceeds of truck sale (less new car) to pay off as many other high interest CC’s and loans.

So this is the order I am focusing on now:

Loan #3   $882   20.00%   $284
Auto loan #2   $1,172   3.84%   $525
Loan #1   $4,676   35.90%   $177
Loan #2   $4,278   27.98%   $194
CC #9   $1,000   26.24%   $41
CC #1   $2,588   25.99%   $28
CC #2   $2,279   24.99%   $72
CC #5   $4,376   14.90%   $109
I'm so impressed with your progress so far and it sounds as if you'll have another big win in a week or two.  Great work and thanks for motivating me to change something up ! 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: DanishMM on March 10, 2017, 01:58:27 PM
Congrats!!
Thats amazing!
Have you and your wife celebrated? I dont mean by buying champagne or lobsters...but a hug and a screw-debt-dance?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: LadyMuMu on March 10, 2017, 06:08:09 PM
I just read this entire thread and am blown away by the progress you've made in such a short time. I only have one small suggestion. When you sell the truck and get a new-to-you car, get one that is as unglamorous as you can stand. (I like your idea of a manual!) I have three reasons for this. 1) It will start to cement your new mustachian identity into your brain each day as you drive around your town in a "less than" car while knowing inside that you are KILLING it in debt eradication. 2) By comparison, it will make you question other fancy pants choices you are still making. Perhaps next time you need something, you'll opt for another new-to-you (ie Craigslist) option first. 3) The obvious visual difference between your car and your wife's may help nudge her a little closer to team Mustachian. Its a visible sign to her about what you're willing to do to bring financial stability to your family.

We're a one-car family. My husband walks to work each and every day. We live in Iowa. Now he loves to walk and we're a hiking family, but this little daily sacrifice gets him a TON of respect from me all the same.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: N on March 10, 2017, 09:59:48 PM
Hey, I think your turnaround is going great! As you flex your MMMuscles, you will get stronger and stronger at resisting spendypants choices.  Keep it up! Keep questioning every expense! Keep talking to your wife and having the tough conversations. Looking forward to following your progress.

PS I was able to sell a car to an aquaintance after sharing I was selling on FB. Dont overlook your own network of friends and relatives when selling a car :)

Good Luck!
N
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on March 10, 2017, 10:43:48 PM
I am actually thinking about getting a manual car since I have never learned to drive stick.  I read MMM’s post about that and it really inspired me.  I have always wanted to learn but as I got older just let it go.  I think learning a new skill (my wife can drive stick) is just what I need right now and someday I can teach my sons.

You should definitely do this. Driving a manual is awesome. Also, a lot of times manual cars especially manual economy cars are tougher to sell due to a lazy and unwilling to learn population... so you might get a little bit of a deal compared to the automatic equivalent.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: PJ on March 11, 2017, 12:26:33 AM
dashh, I wanted to post back this evening to let you know that you inspired me.

I thought I'd cut my budget back pretty far this month, and left myself very little wiggle room so that I could prioritize paying down debt.  But when my utility bills came in much lower than I'd expected, I re-ran my numbers for this month, and decided that "if dashh can get his truck listed and get several bills paid off entirely this month, the least you can do is squeeze out every cent you can toward your debt!"

So I logged into online banking and got that little extra CC payment made!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on March 11, 2017, 09:38:41 AM
Fantastic! 

284 + 525 + 177 + 194 = $1,180 to snowball

So CC#9 ($1,000) only has one more month to live! 

*rubs hands together gleefully*

You're killing this!

Plus the $185 a month saved on TV/internet, and the money he's about to save on gas and insurance when the truck is replaced with a little >40mpg commuter car.  And the money they'll save on eating out because Dash will use some time meal planning/prep cooking at night instead of channel surfing.  It's like a habit snowball too!

Awesome work.  I'm also over here cheering you on.  It must feel great to have that bit of breathing room that will now let you effectively snowball the hell out of those CC balances!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Villanelle on March 11, 2017, 08:18:48 PM
f you return that TV, you can pay off several more of those debts.  Think how good it felt to ditch the first couple.

I kind of hate to keep harping on the TV thing, but it's more than just the TV.  It's a commitment to your new mindset.   You struggle with actually acting on your ideas and impulses.  Yet you are giving yourself a pass on the TV and allowing yourself to follow the old pattern of not following through.

You are doing great.  You are!  But it's important during these early days of change that you keep your feet to the fire, or you'll gradually ease off and be back where you started. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Feivel2000 on March 12, 2017, 12:38:21 AM
Just read everything, great progress, man. My thoughts regarding your wife, just from reading this; If I were in her shoes, I would probably think something like:

"We had a good life with everything figured out and then HE had to chase his stupid real-estate flipping dreams! Now we are in dept. But I haven't burned all that money, I have my job and income, making even some extra money thanks to bonuses. Why should I lose all my nice things (house, car, nails,...)? He f***ed up, not me! "

And from what you wrote, she wouldn't be all wrong. Of course, it's a marriage and you are in it together, but you have to go and lead by example and hope that she comes along. Let her have her nails polished and her nice car and take on a second job to pay for all of it. Work your ass of and be frugal. At some point she will prefer having you by her side on a weekend instead of driving an Uber.

Print out the dept and put it somewhere where both of you see it to keep the situation, and your progress, in mind.

But even without any dept, move closer to your work. I did a 60+minutes commute for some time and it drained me. Think about all the lost time! Your child does not have to lose his friends, if both of you can drive this distance every day, you can drive him once per week to keep the connection.

Oh, and return the TV. How many big screens do you need???
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on March 12, 2017, 01:25:57 AM
Dash, you are doing so well. I think this tv and car repair incident came at the right time, as an alarm bell that with all those good intentions you are prone to slipping back into the old habits. Change won't happen overnight, it takes a while to change your spending habits  You made lots of cuts recently, and while those small changes will help, it is the big ticket items (the cars and the house) which will improve your situation considerably.

I hope the truck sells. Don't regret selling it, nobody needs a truck to commute to his office job (khm, apparently my husband does, but we are not in debt). And i disagree with the previous poster about buying a crappy car, buy a decent looking, fuel efficient small commuter car you are comfortable driving.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ShoulderThingThatGoesUp on March 12, 2017, 05:48:19 AM
You're doing it, dashh. When future posters come and are in a really bad way, we'll point to you as an example that it can be done.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SwedishMoustache on March 12, 2017, 11:01:59 AM
Damn sweet job! keep pounding this! You're killing it! :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Allie on March 12, 2017, 12:49:10 PM
What an awesome read!  You guys are going to do great.  Just remember it is always easy to get another truck, TV, house, whatever.  I was reading a minimalist book, becoming minimalist available on hoopla, recently and it was suggested that you do experiments for 30 days or 60 days or however long and see how it works for your family.  If it doesn't work, that's fine, go back to the old way.  If it does, awesome.  At least that way you know. 

Sell your truck and buy a little car.  If it doesn't work for you after six months, you know for sure and you can go back to make a plan to get a truck again.  Same with the TV.  Go without one of the TVs in a rooms for three months, or the summer, and if it really makes a difference, make a plan to get a new one.  Give up soda and fast food for a month and just see how it makes you feel, if you really want the Big Mac, start eating it again. 

We dug out of six figures of debt with the frugal living and Dave Ramsey plan before mmm came along, but revving up the badassity with the help of this community and blog has really helped us take it to the next level.  Once you start changing your mindset, your wife will join and it will be awesome!  Took my husband a year or so to even consider being more frugal and another to really buy into the plan and make it his own.  But it happened!  Looking forward to reading about your journey!

I'll second how enjoyable it is to take apart a TV.  Our Samsung LCD died a few years ago so we pulled it apart, what's the harm right?  I think it was the capacitor but when we called Samsung to complain about their crappy TV, they sent a guy out to fix it with a new, larger, better part...for free.  If we had just installed the old version, it would have blown again, so a guy to came out and installed the new version.  He was pleased to see the TV already in pieces, it saved him a bunch of trouble!  Always call, always complain, always expect better service, always think of a way that meets your needs and saves money!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: better late on March 12, 2017, 01:32:35 PM
Hey Dashh. I'm cheering you on as I read the recent posts. From your post about the car and TV though I'm  concerned that you may still be using your credit cards rather than making the complete conversion to cash only budgeting. Using one card to purchase while paying down another doesn't move the needle. And I'm commenting because I have been there (we were over $500k in debt inc. mortgage, cc's, 401k loan, car lease, etc just a couple of years ago);  it's hard to be completely honest with yourself when you've spent years skirting the truth of your reality)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Simpli-Fi on March 12, 2017, 02:47:54 PM
I just read this entire thread.  Slow start but the snowball is moving, good job.

Personal Finance is different than "a finance" job...I've seen it first hand with my DW.  It's up to you now to educate yours and set a better example for your kids when they can understand the value of a dollar.

Last face punch you'll need is from your spread sheet.  Total up what your debt is costing you each day.  Then break your wages into a day rate.  Sucks to pay someone because you don't have money, that thought alone should ring out in your dreams so when you wake up tomorrow it's a new day and I hope it costs less than the day before.  Soon your day will earn money.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: queensborocorp on March 13, 2017, 08:02:45 PM
I hate to be the anti-TV nag. (OK, I love being the anti-TV nag.)

Here are some of the things I knew about The Real Adult World, 10 years ago when I graduated from college:

You have to spend a lot of money on a first date, or your date will think you're a loser.
A small car is unsafe in a crash, plus people will think you're a loser.
It is important that all your furniture matches, or people will think you're poor.
You need to wear expensive designer clothes and shoes, or you'll have no friends.
There is no substitute for living in the most desirable neighborhood.
Real adults don't have Ikea furniture or drive old used cars. Real adults buy new, expensive things.
If you can afford something you should buy it. You work hard, you deserve it.

Only later did I realize all of this was lies. Where did I learn such "knowledge"? From TV, of course.

Big corporations pay for TV shows to be made, and it's in their interest to demonstrate that a high-consumption lifestyle is normal and desirable. They want you spending and in debt. And they know that it's very hard for the brain, on a lizard level, to distinguish TV norms from actual social norms in real life.

TV can end up costing you a lot more than you think.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: rpr on March 13, 2017, 08:16:34 PM
I hate to be the anti-TV nag. (OK, I love being the anti-TV nag.)

Here are some of the things I knew about The Real Adult World, 10 years ago when I graduated from college:

You have to spend a lot of money on a first date, or your date will think you're a loser.
A small car is unsafe in a crash, plus people will think you're a loser.
It is important that all your furniture matches, or people will think you're poor.
You need to wear expensive designer clothes and shoes, or you'll have no friends.
There is no substitute for living in the most desirable neighborhood.
Real adults don't have Ikea furniture or drive old used cars. Real adults buy new, expensive things.
If you can afford something you should buy it. You work hard, you deserve it.

Only later did I realize all of this was lies. Where did I learn such "knowledge"? From TV, of course.

Big corporations pay for TV shows to be made, and it's in their interest to demonstrate that a high-consumption lifestyle is normal and desirable. They want you spending and in debt. And they know that it's very hard for the brain, on a lizard level, to distinguish TV norms from actual social norms in real life.

TV can end up costing you a lot more than you think.

queensborocorp -- Welcome to your first post on MMM forums. It is a wonderful one!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Simpli-Fi on March 14, 2017, 06:59:05 AM
The G rated Tyler Durden speech in advertising!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: galliver on March 14, 2017, 12:45:48 PM
3)   Debt:  I am planning on paying off several of our debts in the next month or so.  My wife is getting a bonus of around $3,500 (net) this month which is great.  I should hopefully get around $8-9k from selling the truck and plan on using ~$4k of savings leaving us around $5k.  Also, one of our personal loans will be paid off this month as well.  So if all goes as planned we should be able to pay off around 8 debts which will save us ~1,400/mo which we can snowball.  I am very excited about this as I feel like we will finally be making some progress with the debt!

Ok truck is officially posted on Craigslist, Facebook and my wife's work board!

Hoping for a quick sale!

WOO-HOO! *giant round of applause*

That's all I got :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Optimiser on March 14, 2017, 01:40:51 PM
Here is another post from an internet stranger who is really excited and happy to see you moving in the right direction!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: jessicat on March 14, 2017, 03:28:29 PM
Congratulations on your progress!  So excited for you and your family and your journey!  Can't wait to hear the truck sold.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Verdure on March 14, 2017, 03:51:50 PM
Another internet stranger excited about your progress here!  Congrats on listing the car--that's a huge step. Good luck on a quick sale!  So loving seeing your debt repayment progress; that snowball is super satisfying!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: NeverLost on March 14, 2017, 05:39:14 PM
Hi dashh!  I just found you and am excited to follow you're progress :)  Although my debt isn't to your level, I see so many similarities between us in our debt payoff struggle of feeling deserving of the things we are (unreasonably) purchasing and having a spouse who isn't quite as sold on the emergency of the situation as you are!  Anyway, I know firsthand that once the first steps are made, it's easy to keep that momentum going.  Just don't let stupid non-emergencies deter you!  That's my issue!

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nouveauRiche on March 16, 2017, 06:52:50 AM
This is awesome dashh!  Another internet stranger here, cheering you on from the sidelines.

I'm excited at the progress you've made already.  It's awesome that your wife has agreed to quit the nail salon for now.  Great work posting the truck!

A few things.
Not sure if this has been mentioned or not:  Would it be possible to rent out your house to cover the mortgage?  It involves becoming a landlord, which is sometimes a pain.  But it would allow you to hang onto the house for now.  Also, your 5/1 rate is now is 4.5%, right?  When it becomes adjustable, it may not change that much.  (It's not going to go to 10%.)  Rates are really low.  You might want to check the fine print & see what will happen with your house payment.  (Ultimately, it would be best to lock into a low rate - they can't stay this low forever.)

MMM writes that people who have a debt emergency should be eating only rice & beans until it's fixed.  He makes it sound like a punishment. I've started making red beans and rice regularly and everyone loves it.  I've also been experimenting with red lentil curries (trying to find the perfect recipe).  Red lentils are dirt cheap at Trader Joe's (if you have one).  There are some great recipe threads in the forum.

One thing we learned from MMM is that "little" things do add up.  When we first found MMM about 2 years ago, I though there was no fat to cut in our spending.  We wound up trimming over $1000 per month by cutting out the housekeeper & the lawn guy, bringing meals & snacks to work, calling around for better deals on insurance, dropping cable, changing cell phone plans, etc, plus generally being more conscious of our spending.

Best of luck to you.  I'm looking forward to following your story as you slash these debts!

ETA:  Another thing I love about MMM is that the changes you make will improve your life in many ways (not just financial).  Cooking at home is better for your wallet and your health.  Biking instead of driving saves you money, gets you fit, and is better for the environment.  Etc. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: itstheboz on March 16, 2017, 09:55:46 AM

A few things.
Not sure if this has been mentioned or not:  Would it be possible to rent out your house to cover the mortgage?  It involves becoming a landlord, which is sometimes a pain.  But it would allow you to hang onto the house for now.  Also, your 5/1 rate is now is 4.5%, right?  When it becomes adjustable, it may not change that much.  (It's not going to go to 10%.)  Rates are really low.  You might want to check the fine print & see what will happen with your house payment.  (Ultimately, it would be best to lock into a low rate - they can't stay this low forever.)


Rates were really low, but the Fed just raised the rate from .75% to 1.0% (a 33% increase) this week.  This will impact mortgage rates and other interest rates in the near future.  The historically low rates we've seen in the past are probably gone... If you didn't get under 4% before they start creeping up you probably won't anytime soon. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: horsepoor on March 17, 2017, 07:44:56 AM

A few things.
Not sure if this has been mentioned or not:  Would it be possible to rent out your house to cover the mortgage?  It involves becoming a landlord, which is sometimes a pain.  But it would allow you to hang onto the house for now.  Also, your 5/1 rate is now is 4.5%, right?  When it becomes adjustable, it may not change that much.  (It's not going to go to 10%.)  Rates are really low.  You might want to check the fine print & see what will happen with your house payment.  (Ultimately, it would be best to lock into a low rate - they can't stay this low forever.)


It seems like this might be another plug for selling the expensive house now?  What's "affordable" to many buyers shopping at the top of what the bank will approve them for will decline as interest rates rise.  If the housing market slumps, the Dash family could end up losing equity or even going underwater, whereas selling now and renting near work would be a guaranteed leg up.  Renting is risky and they don't have the financial padding to deal with repairs and legal fees that could be incurred if they get bad renters.

Rates were really low, but the Fed just raised the rate from .75% to 1.0% (a 33% increase) this week.  This will impact mortgage rates and other interest rates in the near future.  The historically low rates we've seen in the past are probably gone... If you didn't get under 4% before they start creeping up you probably won't anytime soon.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on March 17, 2017, 01:14:31 PM
I understand your difficulty in deciding options.  I'm kind of in a similar situation.

My current job, we'll call Job Type-0, has medium pay, and I'm not enjoying it at all.

Job Type-1 I'm applying to / interviewing for is higher pay, but I know it will be a lot more work.

Job Type-2 I'm applying to / interviewing for is medium pay, but I'm sure I would enjoy it.

Job Type-3 I'm not applying to, but will probably do when I am closer to FI is lower pay, but I loved it when I did it previously.

For me, I'll likely jump to either Type-1 or Type-2 if I'm given a reasonable offer.  On one hand, Type-1 will be tough, but it'd move my FI timeline up dramatically.  On the other hand, Type-2 would be wonderful and keep me at my current, or maybe slightly better, financial position.

I think your options are similar.  It doesn't really matter if you go for a Type-1 or Type-2, just get out of what you dread.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: MountainFlower on March 17, 2017, 02:12:48 PM
I work as an administrator in a government funded research institution.  Your background would be appropriate for this type of role, but it's so much more than accounting.  We basically manage programs handling everything from finances to HR and hiring, reporting, and everything in between.  Is there a university or something like that in your area?  Might be worth looking into.  While the salaries aren't as high as the private sector, the environment can be very nice and the benefits are usually very good.  For example, my company puts in 10% of my salary for retirement.  I get 11 holidays and 5.5 weeks off per year, plus lots of work from home flexibility. 

Also, the university that I went to will provide career counseling even for Alumni.  I think that there might be a fee for it....but maybe that would open up your horizons. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RidetheRain on March 17, 2017, 03:54:58 PM
Another idea would be to work for a larger consulting firm.

I work as a consultant for a pretty big company so I don't have to worry about not finding a contract to work for the most part. You get the benefits and the PTO, but work at what you are good at. I know my company is always looking for industry experts to fill out their workforce. Consulting is also a pretty good place to make a career change because you can slowly work your way into it with small contracts here and there to expose you to the new work before you plunge right in.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: meandmyfamily on March 17, 2017, 06:03:55 PM
dashh-I would cut up your credit cards right now to stop any temptation to charge them back up as you pay them off.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SwordGuy on March 17, 2017, 06:29:58 PM
It looks like you're making some real progress.  Good job!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: BeautifulDay on March 19, 2017, 09:57:34 PM
Congrats on all your progress. Posing to follow your journey and send well wishes along your way.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Setters-r-Better on March 21, 2017, 05:18:20 AM
Hi Dashh - regarding your career - it seems like your side hustle of real estate made you pretty happy. Is there something you can do related to that that isn't as capital intensive as flipping houses? Maybe you could work with other investors to advise them on flipping. Maybe you could do some manual labor such as painting, landscaping, get your real estate license, even just clean/organize other people's houses might be rewarding for you..I don't know what you're good at...to both stay involved in real estate and also bring in some extra income to pay down your debts faster. If you could build a side hustle you enjoy, that could help you do two things 1) pay down debt faster and 2) build a business for yourself that you could eventually turn into a full time business.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Poundwise on March 21, 2017, 08:17:16 AM
Quick questions, dashh--
1. any bites on the truck sale?

2. What about the house flipping did you like? Was it working with your hands (if you did work yourself)? Was it the gambling aspect of sales? Was it having complete control over a project? Was the satisfaction of turning something old to something new? Can you bring any of these aspects to your current line of work, at least temporarily until house flipping becomes profitable again?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Paul der Krake on March 21, 2017, 02:27:18 PM
Unfortunately, your truck is worth too much to attract many buyers in Raleigh. Most vehicles being sold are in the 2-7k range, simply because there are few buyers who can pony up much more than that.

When I was in the used car market in that area, I would constantly see reposts of people who wanted too much for their new-ish vehicles, and they would repost a few weeks later and you could tell from the ad that they were mad that no serious offers were made.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ToTheMoon on March 21, 2017, 09:23:13 PM
Excellent! 

Interest rates like that are very difficult to overcome.  Glad you were able to use her bonus to clear yourselves of that burden!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: kuchihige on March 21, 2017, 10:06:04 PM
I also took it by the local Auction Direct (like Carmax) and they offered $11,500 to buy it.  It is very tempting to just sell to them or a dealer and be done with it.  I have another dealer that wants to look at and said they will can offer $12,800 contingent upon inspection.  I have a feeling they will lower the final offer to around what Auction Direct offered but we will see.  I can probably get around $13k private party but have to factor in the time to deal with people, look out for scams, confirm funds, etc.  So I am tempted to go with the quick sale and move on especially if the dealer comes in close to $13k. 

These last two sentences feel to me like you are mentally working you way towards selling the car for the dealer offer.  Because it's easier.  That 1 or 2 k difference between private party and trade-in is huge though - it would wipe out another 1/150th or so of your debt.  These little decisions, like putting in the extra effort to sell the car yourself, and returning that new $500 TV, add up big time.  It's the difference between moving at the pace you need to succeed in your goal to wipe out debt, which will feel amazing, or slipping in to old patterns and spending the next decades under the same burden.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: sparkytheop on March 21, 2017, 10:34:37 PM
Amazing progress!

One other thing to consider with dealer vs private sale and how long it may take...  How much owed-in-interest are you piling up in the extra (days? weeks? months?) it takes to find a private buyer? 

You may lose $1k or so in income by selling to a dealer, but how much money will you save paying off one or two of the debts a month early?  Two months early?

The longer it takes to sell the car privately, the more money you will shell out in interest.  It may be that taking a lower dollar amount on the truck will end up being the better deal.  Just something to consider.   As someone said earlier, I've often seen the same cars listed over and over again for a long time.  I'd give myself a deadline to sell privately, and then take the offer from the dealer if they aren't low-balling you. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: wintertell on March 22, 2017, 07:29:54 AM
FIRST - Congrats on paying off that loan with that awful, awful rate! That alone has to feel amazing!!

Maybe re-post all the debts in a list with a progress update so you can see how much you have cleared/what you have gotten rid of?

I'd give myself a deadline to sell privately, and then take the offer from the dealer if they aren't low-balling you.

Living in NC, I think these two folks are right: That is a higher price for a used car in NC.

Try giving it two weeks or three weeks, and if it still isn't sold, I would just take the dealer price. You would have to drop the price anyway, and then it would very close the Auction Direct or other dealer price.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: patchyfacialhair on March 22, 2017, 07:40:54 AM
Following. Keep it up OP! Life's too short to be stressed by money. The sooner you get out of these holes, the better off you'll be!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: thatluckydog on March 22, 2017, 10:02:15 AM
I am looking to follow the thread. I have to say that it is the tough stories (often made to look simple) on this site that I find the most enjoyment out of reading. You are really making some profound shifts that are setting a great example. While it is hard work, you are making results happen so quickly it looks more effortless from my side. The is one of the signs of mastery. Keep up the great work!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Buckminster1985 on March 22, 2017, 10:20:30 AM
Have you considered Debtors Anonymous?  I have seen miracles happen.  A friend eliminated $250K in debt without bankruptcy.  I believe in this situation one must assess the root cause of the debt accumulation.  Why is it that you've lived beyond your means for so long?  This will help you with the pressure and guilt as well.

In terms of practical solutions, I'd suggest the following:

1) Sell the cars and buy used.
2) Take in a renter or rent a room on Airbnb.
3) Cut up all credit cards and only use cash or debit.
4) Consoliate all credit card debt using the Ramsey approach already mentioned.
5) Insist your children go to state schools and apply for all of the financial aid possible.
6) Focus on the free or low-cost pleasures of life, such as walking, biking and hiking that provide far more joy than shopping and spending.
7) Consider selling your house and moving into a much cheaper one.  You'll probably do this eventually once your kids graduate.

I hope this is helpful.  I cannot stress enough how important it is to understand the impetus of the debt spending in the first place.

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: benjaminbutton on March 22, 2017, 01:33:32 PM
Have you considered Debtors Anonymous?  I have seen miracles happen.  A friend eliminated $250K in debt without bankruptcy.  I believe in this situation one must assess the root cause of the debt accumulation.  Why is it that you've lived beyond your means for so long?  This will help you with the pressure and guilt as well.

In terms of practical solutions, I'd suggest the following:

1) Sell the cars and buy used.
2) Take in a renter or rent a room on Airbnb.
3) Cut up all credit cards and only use cash or debit.
4) Consoliate all credit card debt using the Ramsey approach already mentioned.
5) Insist your children go to state schools and apply for all of the financial aid possible.
6) Focus on the free or low-cost pleasures of life, such as walking, biking and hiking that provide far more joy than shopping and spending.
7) Consider selling your house and moving into a much cheaper one.  You'll probably do this eventually once your kids graduate.

I hope this is helpful.  I cannot stress enough how important it is to understand the impetus of the debt spending in the first place.

I think the OP is well on their way. The original post is from January and based on their updates making awesome progress.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Zoot on March 22, 2017, 07:08:55 PM
We got my wife's bonus this week and it was more than expected.

Happy to report that the "mafia" loan is now paid off - good riddance!

Loan #1   $4,676   35.90%   $177

AWESOME work!  :)  What account are you going to snowball the $177 payment into next? 

Can't wait to see more $0 balances!  Keep it up!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: DanishMM on March 22, 2017, 11:20:23 PM
Awesome work!
 In one post you wrote about trying to get in financial shape and then losing motivation. I read the MMM post om Stoicism and then one really dark thought crept up on me. What if something happened to me and my husband would end up alone with our kids. Not only would he have to deal with the emotional aspect of raising the kids but then ALSO messy finances? That really kept me motivated and were well on our way to FI now. Just a creepy dark thought from an internet stranger.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SweetLife on March 26, 2017, 06:25:59 AM

Thanks for this.  We are not using the credit cards as they are all pretty much maxed out.  So all cash.

I will have to really watch it as we pay them off though to make sure we don't try to use them when something unexpected comes up like a car repair, etc.

DON"T WATCH IT ... CUT THEM UP!!!! GET RID OF THEM ALLLL OF THEM ... save ONE and only one for DIRE EMERGENCY. :)

YOU are doing AWESOME! But if you think that you MAY use your CC's its time to not have them for awhile.

Tough love...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Rewdoalb on March 26, 2017, 11:58:28 AM

Thanks for this.  We are not using the credit cards as they are all pretty much maxed out.  So all cash.

I will have to really watch it as we pay them off though to make sure we don't try to use them when something unexpected comes up like a car repair, etc.

DON"T WATCH IT ... CUT THEM UP!!!! GET RID OF THEM ALLLL OF THEM ... save ONE and only one for DIRE EMERGENCY. :)

YOU are doing AWESOME! But if you think that you MAY use your CC's its time to not have them for awhile.

Tough love...

Agree with this. Think about it...You just financed a new TV at essentially 35.9% interest because "something unexpected [came] up".  Need to keep building the frugality muscles without giving yourself an easy path to the consumer couch.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RidetheRain on March 28, 2017, 01:21:57 PM

Thanks for this.  We are not using the credit cards as they are all pretty much maxed out.  So all cash.

I will have to really watch it as we pay them off though to make sure we don't try to use them when something unexpected comes up like a car repair, etc.

DON"T WATCH IT ... CUT THEM UP!!!! GET RID OF THEM ALLLL OF THEM ... save ONE and only one for DIRE EMERGENCY. :)

YOU are doing AWESOME! But if you think that you MAY use your CC's its time to not have them for awhile.

Tough love...

Agree with this. Think about it...You just financed a new TV at essentially 35.9% interest because "something unexpected [came] up".  Need to keep building the frugality muscles without giving yourself an easy path to the consumer couch.

If you can handle it (ie self-control). I would not recommend cutting up all your cards. Instead, you should re-educate yourself on what a credit card is for as an MMM reader. Credit cards are to be PAID in FULL every month. Or every week if you're paranoid like me. Credit cards are only bad for those without self-control. You know yourself best, but I would stretch those control muscles if at all possible.

Just a reminder to the doubters. Credit cards protect from identity theft. A small amount, but if someone steals your debt card number then it's WAAAAY worse than if they steal your credit card number. You can refuse to pay a bill but there's no response to a drained account. Additionally, cards can offer some pretty awesome rewards. I run a lot of money through my cards and pay them all in full every month. This means that I get cash-back and free amazon money to use on groceries, clothing, and housewares. I wouldn't recommend a travel card (reward miles) personally because vacations are extra and you don't want to feel the need to spend miles if you aren't already planning a vacation, but other cards are often well worth using.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: marty998 on March 28, 2017, 02:28:41 PM
Well done Dashh. Nice to hear that 36% loan is gone.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: farfromfire on March 29, 2017, 03:17:34 AM

Thanks for this.  We are not using the credit cards as they are all pretty much maxed out.  So all cash.

I will have to really watch it as we pay them off though to make sure we don't try to use them when something unexpected comes up like a car repair, etc.

DON"T WATCH IT ... CUT THEM UP!!!! GET RID OF THEM ALLLL OF THEM ... save ONE and only one for DIRE EMERGENCY. :)

YOU are doing AWESOME! But if you think that you MAY use your CC's its time to not have them for awhile.

Tough love...

Agree with this. Think about it...You just financed a new TV at essentially 35.9% interest because "something unexpected [came] up".  Need to keep building the frugality muscles without giving yourself an easy path to the consumer couch.

If you can handle it (ie self-control). I would not recommend cutting up all your cards. Instead, you should re-educate yourself on what a credit card is for as an MMM reader. Credit cards are to be PAID in FULL every month. Or every week if you're paranoid like me. Credit cards are only bad for those without self-control. You know yourself best, but I would stretch those control muscles if at all possible.

Just a reminder to the doubters. Credit cards protect from identity theft. A small amount, but if someone steals your debt card number then it's WAAAAY worse than if they steal your credit card number. You can refuse to pay a bill but there's no response to a drained account. Additionally, cards can offer some pretty awesome rewards. I run a lot of money through my cards and pay them all in full every month. This means that I get cash-back and free amazon money to use on groceries, clothing, and housewares. I wouldn't recommend a travel card (reward miles) personally because vacations are extra and you don't want to feel the need to spend miles if you aren't already planning a vacation, but other cards are often well worth using.
Everything in this post is correct, assuming self-control. However, many don't have that self-control and succumb to mindless spending. Just the other day someone wrote in a thread here that they signed up for a credit card for the rewards and ended up incurring thousands $ of debt with 20% interest. For these people, having a credit card does not exercise their "control muscles", it's akin to giving alcohol to an alcoholic.

tldr if you cannot stop yourself from spending, cut up the cards
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: 10dollarsatatime on March 29, 2017, 10:13:39 AM
Chiming in with my congratulations on your progress.

I also had a Frontier when I found MMM.  It took me around 5 months to sell the beast for similar reasons that it's been hard for you.  It was a bittersweet relief when I finally got rid of it and replaced it with a 15 year old Honda.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: cyndre4 on March 29, 2017, 03:24:42 PM
Posting to follow!
It's great watching you start to make real, concrete changes. I'm using your progress to inspire my own, I really appreciate your honesty!
A question for you: It seems like a lot of folks are suggesting you return the TV. You've been amazing with introspection so far, so how about a small assignment? Can you let us know more facets about why returning the TV isn't happening? Are you worried about the kids' reaction? Is it a subtle way to feed your consumerism by buying the thing, then just kind of never returning it? As a way we can help, you mentioned feeling difficulties around having the conversation with your wife. Maybe we can help give you some conversation starters in that area? As you learn and continue to grow, you'll of course hit bumps in the road! Being able to work with your wife and effectively say 'I made a mistake, I'd like to make a different choice' will be incredibly powerful!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: KDubs on March 29, 2017, 04:34:26 PM
You can do it!!! Sometimes after you rip off the Band-Aid you realize it hurt less than you anticipated, and was a better way than that slow, one-armhair-at-a-time process. Following along...
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Prodigal Daughter on March 31, 2017, 10:18:34 AM
posting to follow
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RidetheRain on March 31, 2017, 04:18:04 PM
Hello all,

As always a big thanks to everyone on the forum for your support and posts!

I just wanted to throw out an update on some things:

1)    Budget/expenses:  We have been tracking all expenses for three months now!  In the past, we would get around one month in and just fall apart and go back to our old spending pattern.  I think this time it is finally going to stick.  I need to update some expenses this weekend and will post our Jan – Mar actuals and updated debt totals.  We have made some good progress on some things like eating out/shopping (except the TV), but really need to do better on groceries/café charges.  We just need to start better meal planning and I need to cut the junk food and soft drinks. 

2)   Health/diet:  My goal is to start a new diet this weekend which is supposed to help with reflux (LPR or silent reflux to be specific).  It will mean no soft drinks for two weeks and it is pretty restricted (low acid/fat).  I tried it once before and made it about a week and saw some improvement in my coughing, so I really want to stick with it this time.  I need to figure out exercise as well as I want to start working out again.  I use to weight train and do cardio several days a week until I lost my job two years ago.  Since then my exercise has been non-existent and even though I am still relatively thin, I have definitely traded a lot of muscle for fat (not to mention my health has probably suffered).  I also am finally realizing that I eat snack/junk food like a teenager.  I am talking Mountain Dew, candy bars, Oreos and Doritos before bed.  It is such a bad habit and I have to kick it.  I have been putting so much junk in my bottom I am surprised I don’t feel worse than I do.  I also think the habit is very related to being worn out when I get home.  After we get home (after that 1-hour commute), eat dinner, get the kids ready for bed and finally sit down we are worn out.  We usually watch a little TV and that is when I have my junk snack and then bed.  My new diet will cut that out since I am not supposed to eat within a few hours of bedtime. 

3)   Truck:  No serious buyers on the truck.  I lowered the price a little so we will see over the weekend.  I am taking it to a dealer tomorrow that is supposed to pay more than CarMax so I will see what they offer.  I am ready to just sell it and get started learning to drive a manual Honda. 

4)   TV:  Yes, the TV is still on the wall.  My wife and I actually talked about it briefly in a another discussion.  She was contemplating tagging along with a friend that had to travel for business.  She was only going to have to pay for airfare as the room would be covered.  We discussed it and in the past I would have said “go for it, that’s a good deal!”  But this time I said I do not think that is a wise financial decision given our situation and what we are trying to do.  She was a little surprised at first but agreed.  In the process of discussing the trip I mentioned that we had to work on changing our mindset when it comes to spending.  The old mindset is what got us into this situation and we cannot continue to make decisions that way if we want to get out of it.  I mentioned the TV and how we should have never bought it and I was thinking about taking it back.   She said we shouldn’t really bother with it since it is already mounted, etc.  I just left it at that for now since I was more focused on the trip in the moment but we need to discuss it again.   


Maybe I'm odd, but based on that conversation I would NOT take back the TV. Yes, you shouldn't have bought it in the first place. Easing the SO into this lifestyle is hard and you asked her not to take a trip - 100% her fun. That's a win that deserves a reward. The loss of something she is already enjoying on top of not taking a trip would easily make this process to the fugal world feel stifling and horrible. Keep that progress fun (for both of you)!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: englishteacheralex on March 31, 2017, 07:42:42 PM
^ yes to this. The tv is up on the wall. Leave it be. Wife agreed to not going on a trip. That's a big win. Maybe she'll come around, sounds like she's on the right track. Let selling the tv be her idea in six months or just stick with it and concentrate on other wins.

Also, getting rid of the car sounds like a good idea to me; I generally like to cut my losses and move on ASAP for the psychological boost as well as the money boost. Cars that are $10k + are usually harder to sell on craigslist. Get the momentum going, I say, and don't worry about plus or minus a grand or two that you're losing by not fully optimizing. Wife may see the tremendous change and start getting more and more on board--that's worth the 1-2k right there.

Well done! Oh, so feel you on the health stuff. I'm working on it, too, as are a lot of people here, I bet. Doritos and Oreos are so darn delicious.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on April 01, 2017, 09:35:49 AM
^ yes to this. The tv is up on the wall. Leave it be. Wife agreed to not going on a trip. That's a big win. Maybe she'll come around, sounds like she's on the right track. Let selling the tv be her idea in six months or just stick with it and concentrate on other wins.

Also, getting rid of the car sounds like a good idea to me; I generally like to cut my losses and move on ASAP for the psychological boost as well as the money boost. Cars that are $10k + are usually harder to sell on craigslist. Get the momentum going, I say, and don't worry about plus or minus a grand or two that you're losing by not fully optimizing. Wife may see the tremendous change and start getting more and more on board--that's worth the 1-2k right there.

Well done! Oh, so feel you on the health stuff. I'm working on it, too, as are a lot of people here, I bet. Doritos and Oreos are so darn delicious.

I agree i love Doritos, Oreos, & junk food I can't not eat them if they are around... However, for me it is easy for me to not buy them at the store especially with the side motivation of not spending money but it is next to impossible for me not to eat them all in a couple days once I have them in my home.

I just keep almost zero convenience food in my house. Even though I know there is no food I still can't help but go around the kitchen opening all my cabinets looking for stuff and the only thing I ever find is ingredients that I need to actually do work to prepare into a meal so I end up just cooking and eating my 3 meals and not really snacking much if at all besides for maybe a handful of peanuts every once and a while.

I actually do keep some soda as something to use for mixed drinks or for when people come over but I find that if I keep them out in the garage or laundry room non-refrigerated and not in the fridge ready to drink then I have to decide to drink them an hour before I actually want it so it can cool down in the fridge so I can't just drink one out of convenience.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on April 01, 2017, 03:48:11 PM
If you are doing the shopping, don't buy crap. Definitely wean yourself off the after dinner snack. Expensive and unhealthy. Reduce it first if you can't go  cold turkey. Buy the snack package, the minis. Have only one not the bag.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: englishteacheralex on April 01, 2017, 05:00:57 PM
Man I just can't even keep the stuff in the house. I go bonkers and eat all of it. Girl Scout cookies are the worst. I'll tell myself I have to eat the whole box because that way there won't be any in the house anymore and I won't have to torture myself with wanting infinity of cookies.

Yeah, I just buy staples anymore at the market and that way there's nothing to eat that doesn't take a bunch of prep time. We even got an ice cream maker and sometimes will keep heavy cream around, but that's two hours of waiting for a pint of ice cream and we only make it for guests.

We do keep trail mix but it isn't crack to me like most junk food and I keep a 1/4 cup measuring cup in the bag so I know how much I'm eating.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: freya on April 07, 2017, 06:40:16 AM
tldr if you cannot stop yourself from spending, cut up the cards

I agree with this sentiment, but given that you're contemplating new jobs, moving etc, you need to protect your credit rating zealously.   You absolutely have too many credit cards but you will need to keep most of the accounts alive.  Pick a few that you're going to hang onto for regular use, based on the following criteria:

- do they pay cash-back rewards?
- have you held them for longer than your average account age?  (You can get this info from Creditkarma)

Put the rest away deep in a drawer.  It goes without saying that the instant you've paid off a card, you either cancel the account or set it to autopay in full each month.

So have you sold the truck yet?  I'd take a dealer offer as low as $12K, because as another poster pointed out, with debts in the 20% interest range, time is SERIOUS money.  20% interest on $12,000 is $200/month, so that's how much you're paying in opportunity cost.  Plus the extra expense of driving the truck in the meantime.  And I am once again getting the impression that you are in need of some motivation in the form of concrete progress.  (ps - yes learn to drive a stick shift!!!)

Also, can we see that list of debts again??  The progress is great and we are all in need of an update!





Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Feivel2000 on April 17, 2017, 11:17:14 PM
Hello all,

As always a big thanks to everyone on the forum for your support and posts!

I just wanted to throw out an update on some things:

1) Budget/expenses:  We have been tracking all expenses for three months now!  In the past, we would get around one month in and just fall apart and go back to our old spending pattern.  I think this time it is finally going to stick.  I need to update some expenses this weekend and will post our Jan – Mar actuals and updated debt totals.  We have made some good progress on some things like eating out/shopping (except the TV), but really need to do better on groceries/café charges.  We just need to start better meal planning and I need to cut the junk food and soft drinks. 

2)Health/diet:  My goal is to start a new diet this weekend which is supposed to help with reflux (LPR or silent reflux to be specific).  It will mean no soft drinks for two weeks and it is pretty restricted (low acid/fat).  I tried it once before and made it about a week and saw some improvement in my coughing, so I really want to stick with it this time.  I need to figure out exercise as well as I want to start working out again.  I use to weight train and do cardio several days a week until I lost my job two years ago.  Since then my exercise has been non-existent and even though I am still relatively thin, I have definitely traded a lot of muscle for fat (not to mention my health has probably suffered).  I also am finally realizing that I eat snack/junk food like a teenager.  I am talking Mountain Dew, candy bars, Oreos and Doritos before bed.  It is such a bad habit and I have to kick it.  I have been putting so much junk in my bottom I am surprised I don’t feel worse than I do.  I also think the habit is very related to being worn out when I get home.  After we get home (after that 1-hour commute), eat dinner, get the kids ready for bed and finally sit down we are worn out.  We usually watch a little TV and that is when I have my junk snack and then bed.  My new diet will cut that out since I am not supposed to eat within a few hours of bedtime. 

3)Truck:  No serious buyers on the truck.  I lowered the price a little so we will see over the weekend.  I am taking it to a dealer tomorrow that is supposed to pay more than CarMax so I will see what they offer.  I am ready to just sell it and get started learning to drive a manual Honda. 

4)TV:  Yes, the TV is still on the wall.  My wife and I actually talked about it briefly in a another discussion.  She was contemplating tagging along with a friend that had to travel for business.  She was only going to have to pay for airfare as the room would be covered.  We discussed it and in the past I would have said “go for it, that’s a good deal!”  But this time I said I do not think that is a wise financial decision given our situation and what we are trying to do.  She was a little surprised at first but agreed.  In the process of discussing the trip I mentioned that we had to work on changing our mindset when it comes to spending.  The old mindset is what got us into this situation and we cannot continue to make decisions that way if we want to get out of it.  I mentioned the TV and how we should have never bought it and I was thinking about taking it back.   She said we shouldn’t really bother with it since it is already mounted, etc.  I just left it at that for now since I was more focused on the trip in the moment but we need to discuss it again.   
Should we be worried about the promised but missing update?
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: albireo13 on April 18, 2017, 04:49:17 AM
Cut up most of your CC cards and keep one or two for emergency.  Keep them in a file, not in your wallet.
Do NOT carry around a CC anymore.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ubermom4 on April 19, 2017, 06:02:34 AM
OP -- good job getting started, staying focussed and motivated. I wanted to comment on your day-to-day spending. Please consider converting to cash only-- always. At the beginning of the month, put cash ($$$) in envelopes (I use paperclips in my wallet) for spending categories -- groceries, clothing, personal, etc. for the entire month. This needs to be done for both of you. Using cash activates the pain sensors in your brain. It is not rational but emotional.  As the month progresses and the cash visibly dwindles, behavior is changed for both of you.

Each of you needs funds that they can spend as they wish -- no questions asked. You can agree on this amount -- it might be $25 each month for each of you or more. You can start with one figure and then lower it as you get used to it. If your wife wants to travel with her work friend for a fun trip -- Yay!! Her funding comes out of her spending money. She doesn't need to ask you for permission. She is responsible and independent.  If she really wants the trip, she will use her personal spending money.

This exceptionally simple cash system has been DEATH to our impulse purchases and all purchasing while allowing us each to feel freedom. We don't feel like we are giving up things -- each of us makes our own choices to support our family's goal. Hope this helps you. Great job so far.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: bugbaby on April 23, 2017, 07:31:11 AM
Ummm, is dashh still on the wagon?

Sent from my KIW-L24 using Tapatalk

Title: Re: Reader Case Study - $231k in debt and need help!
Post by: nouveauRiche on April 24, 2017, 09:32:49 PM
Ummm, is dashh still on the wagon?

Sent from my KIW-L24 using Tapatalk

I was wondering the same thing.  Hope we hear from him soon.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Optimiser on April 28, 2017, 11:50:35 AM
Dashh come back. We need updates.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: dreadmoose on April 28, 2017, 04:08:55 PM
Posting to follow, this is an awesome story that I hope isn't over right when it was getting great.

Great work so far, I especially like the self-aware discussion on why you're having trouble. Hopefully the forums can help you through some of it.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vaulter on April 30, 2017, 02:28:35 PM
Okay, Dashh, it has been a month since your last post. Let us know how awesome you are doing and/or what else you would like help with. You've got this!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: CmFtns on May 25, 2017, 11:26:09 AM
Dammit Dash why did you quit on us? =(
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Vindicated on May 25, 2017, 11:36:46 AM
His profile says he was last active yesterday, so he's still around.  Give him time, and don't give up on him.  :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: lampstache2 on July 07, 2017, 08:31:59 AM
Hey Dash! Would love to hear how things are going!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: SugarMountain on July 07, 2017, 03:07:12 PM
Damn, this was like a great movie where the theater lost power with 5 minutes to go!

Hopefully dashh is just keeping his successes to himself and is still making the great progress he was earlier in the year.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: GoConfidently on July 08, 2017, 08:58:32 AM
Hey Dashh. I love the progress you made. Feels good to take those first concrete steps forward, and we all get a little boost remembering how we felt when we did the same. Hope you're hanging in there. You were tackling a lot of huge life changes at once, so if some things fell to the wayside don't be discouraged! One foot in front of the other.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: baburu on August 25, 2017, 02:50:34 PM
Congratulations on the work-from-home job! I'll bet those 2 hours a day you won't have to commute will increase your happiness significantly.

Too bad about the Bad and the Ugly. Even more reason to rejoice on the Good.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: mudstache on August 25, 2017, 02:56:23 PM
Yay, welcome back!

For your budget "fail," did you try to do too much too fast?  Maybe there's a way to find a happy medium between spending every penny and not spending any pennies, that feels empowering and responsible without feeling like your life is over.  Good luck!  This whole thread is still rooting you on!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bee21 on August 25, 2017, 03:19:03 PM
Glad you are back and glad you didn't give up after a setback. If you fell off the wagon, you can climb back on. Analyse what went wrong, why you couldn't be consistent and work on that.

Why don't you move over the journals and start posting regularly? It will keep you accountable.

Pick one thing and fix that. I suggest the car now that you are working from home. Once you cross that off your list you can move onto the next target.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bracken_Joy on August 25, 2017, 03:33:34 PM
Glad you're back! Sometimes the best way forward is to just keep trying, failing, and trying again. It might not be the most linear approach, but it moves you forward!

COngrats on the job.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Optimiser on August 25, 2017, 03:37:45 PM
Glad to see you back.

Regarding the ugly, the awesome thing is that you had savings available that could take a hit. Not long ago you would have put it on a CC or taken out some sort of emergency loan for that. That's progress!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: galliver on August 25, 2017, 05:02:46 PM
2)  The Bad:  We have completely fallen off our budget for months now.  We did great for about 3 months and gradually let things go and it has not been good.  No new debt thankfully but also no extra to paydown debt either.  I am currently revising our budget and we have both committed to getting back on track in September.  Also, I decided to not sell my truck but recently have been thinking about selling it again.

Something I've found in trying to change my own habits and patterns is that while there is usually a strong initial commitment, most people eventually slip up. As such, it's been almost more important to learn to start the habit again, than to just continue it. Every single month you're making a whole new budget plan. Every single week, every *day* actually, you have a chance to look at your expenditures so far and say "ok, obviously we've already overspent our grocery budget by $20 and we're only halfway through and we're not going to make it for 2 weeks with *no* groceries as a family with kids. But how much do we really need, what can we make from the pantry, how can we keep from going in the red here?"
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: RidetheRain on August 28, 2017, 04:02:40 PM
Looks like we fell off the wagon at the same time! Not a great club to be in, but if it helps, I climbed back up onto a slightly shorter wagon. It's easier to get on and doesn't hurt as much falling off.

I'm sorry to hear about your house. It cost you money and probably stole a lot of your time too. At least you have your commute hours back! Reducing my commute was a huge turnaround point for me so I hope you remember to enjoy and be thankful for that change even as you work on your budget which will go up and down a lot as you exercise your money muscles.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ATR on August 30, 2017, 03:01:33 PM
just made it though 8 pages of postings..what a read! very impressed by the changes you have made already and +1 to everyone else who has already said that they are rooting for you. me too! good luck getting back on track.

did you end up hanging up a list of the debts on the fridge so that you can track your progress? i am a huge fan of visual aids and maybe it will be the reminder you and the wife need to get yourselves back in debt-crushing mode.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: sea_saw on September 03, 2017, 05:35:52 AM
I think this was the first thread I happened across on the forums - nice to see it pop back up! And congrats on not building up any further debt.

I'm with the people who have mentioned there's clearly a lot going on for you in terms of unconscious motivations driving your spending. You don't have to answer here, but maybe some questions to think about are: how does looking at your old (and now your new) budget make you feel? Have you looked over what you ended up 'overspending' money on in the last few months, how did those purchases feel at the time and how do they feel in retrospect? What kind of mood or frame of mind were you in when you made those decisions?

You got this :)
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: zee dot on September 08, 2017, 08:49:50 AM
dashh--

I feel hypocritical chiming in so soon after joining the site but I read this thread with increasing disbelief.
I consider myself a kind person and want to be supportive as people have been to me in my fumbling attempts to gain some financial savvy but...

OMG sell that fucking truck! 
How is this still a discussion point? 
It's been 235 days since you wrote your #2 step was to sell both cars and get cheap ones.  You wrote that DW wasn't going to take it well. 
You've spent so much time telling us about your wife's Pilot that it's like you don't even realize you have the SAME SCENARIO going on with your truck.
Sell it, take a picture, frame it, hang it on the wall.

You've distracted yourself with talk about junk food and job changes for eight months!  OMFG! 
It took you from January until March to take this forum's advice and use your savings to pay off Loan #3.  THREE MONTHS.  And then you did it in five minutes, got a bunch of high fives...and bought a TV. 

Then you spent three months talking about junk food.  Why is there even junk food in your house?  You can't afford it! 
If grocery delivery is an option in your area you should use it so that you're only bringing food into the house that should be there.   You'd pay for the delivery fee with what you didn't spend on Doritos.

You're still posting about a career change.  Get your shit in order first!  Spend five minutes a day daydreaming about real estate then go back to your mindless job and pay off your debt.  You don't get a career change when you are this much in debt!!!  You're working from home now...you need to be a super employee not half assing it with six open tabs on Zillow.  Keeping that job is important!

That god damn friggen TV!!!!  That was where this thread went off the rails.  You just skim past all the pertinent questions. 
DID you post your debt list on the fridge?
DID you have a garage sale?
DID you contact the IRS about a First Time Penalty Abatement?
DID you go to cash only jar/envelope spending? 
DID you call each lender and ask for lower rates?
DID you ask your credit union for a consolidation loan? 
DID you ask your wife to read your original post?
DID you make a colorful visualization of your debt that you let the wife/kids color in when something is paid off?

BUT! You made it three months on the budget when you previously bailed after one month.  That is encouraging.
Think you can do another three months?  Through the end of the year?   Christmas is coming...the credit card goose is getting fat...are you ready for an austere holiday season? 

On Jaunary 19th shanghaiMMM wrote:
 
"OK. This is it now Dashh. You've had 101 fantastic, helpful, practical ideas.
It's now up to you to go away and implement the ones you choose.
Keep us updated and best of luck!"

What went wrong?

You've been complimented on your awareness.  It's time to turn awareness into action.
The advice on this forum is good advice!  Fucking follow it!

Wishing you all the best even if the above sounds harsh.



Title: Re: Reader Case Study - $231k in debt and need help!
Post by: dashh on December 09, 2017, 01:17:20 PM

What went wrong?

You've been complimented on your awareness.  It's time to turn awareness into action.
The advice on this forum is good advice!  Fucking follow it!


Hello all,

Dashh still here...even though most of you probably thought you would never hear from me again.  In fact, after the post by zoe2dot I pretty much was going to write off the forum and move on.  I even got so pissed off that I deleted all of my posts and tried to completely delete my original post and profile.  I guess the truth does hurt as they say.

I have had some time to reflect on it though and zoe2dot was right.  I am aware but cannot commit and follow through.  It has been an issue for me for a while as my all consuming debt shows.  I have used distractions like career changes and junk food.  However, I see what I am going through now as a desire to make changes in many areas of my life - not just finances.  It is probably the cliche mid life crisis but whatever it is I need change.  But a lot of that change can't happen without me getting my financial shit in order.

Anyway, I am finally starting a journal to work through this and I hope you will come along for the ride.  It is called Dashh: A Day in the Life (https://forum.mrmoneymustache.com/journals/dashh-a-day-in-the-life/).

Thanks to the forum and to zoe2dot for the punch in the gut I needed.

 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Bracken_Joy on December 09, 2017, 01:21:45 PM
dashh- facepunches are called that for a reason. They sure as hell don't feel good. But it takes a really mature person to feel the sting, but then still reflect on it and want to make a change. I really wish you all the best in your journey. This stuff isn't easy. It is *simple*, but it is not easy. Kudos on self awareness- that's well and truly the first big step.
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: ToTheMoon on December 09, 2017, 01:38:54 PM
Awesome self-reflection @dashh, I will definitely be following along to see how your journey progresses!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Zoot on December 09, 2017, 02:39:42 PM
Waking up hurts sometimes.  But as painful as it was to hear all of that, you really did HEAR it.  While it would have been easier just to go back to sleep, you DIDN'T--awesome, awesome, awesome.  I'm so proud of you.  :)

Believe me, it will be SO WORTH IT. 

Headed over to your journal now!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: zee dot on December 11, 2017, 07:55:54 AM
Glad you came back, dashh.
I thought about you a lot in the interim.
Your journal will surely be one of the most read journals--we're all eager to see what you're up to!
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: Smurfy on December 22, 2017, 04:54:17 PM
This person is insolvent and should probably start by consulting with a bankruptcy attorney.  The references to payment plans on credit card debt speak of someone that has been missing or is behind on payments to at least one creditor. 
Title: Re: Reader Case Study - $231k in debt and need help!
Post by: dashh on December 23, 2017, 01:17:06 PM
This person is insolvent and should probably start by consulting with a bankruptcy attorney.  The references to payment plans on credit card debt speak of someone that has been missing or is behind on payments to at least one creditor.

Yes, many people have suggested I speak with a bankruptcy attorney and I have considered it.  We have around $90k of unsecured debt which a part of me would love to see just go away.  However, I realize that it is not that simple and another part of me feels like we do not deserve to have that just wiped out.  Plus given our income, I am not sure we could even go that route. 

I may still meet with someone just to get an idea of our options.